EXHIBIT 10.75
NET INDUSTRIAL LEASE
THIS LEASE IS BETWEEN NONAR ENTERPRISES,
A CALIFORNIA GENERAL PARTNERSHIP ("LANDLORD"),
AND
IPAC PRECISION MACHINING, INC.
A CALIFORNIA CORPORATION ("TENANT"),
EXECUTED AS OF NOVEMBER 18, 2000
TABLE OF CONTENTS
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1. LEASE OF PREMISES. 3
2. EXHIBITS AND ADDENDA. 3
3. DEFINITIONS 3
4. DELIVERY OF POSSESSION. 5
5. ACCEPTANCE. 6
6. USE, LIMITATIONS. 6
7. RENT. 9
8. LATE CHARGES. 9
9. SECURITY DEPOSIT. 10
10. OPTION TO EXTEND. 10
11. ADDITIONAL SPACE - RIGHT OF FIRST REFUSAL. 10
12. OPERATING EXPENSES. 10
13. TAXES; ASSESSMENTS. 11
14. MAINTENANCE. 12
15. UTILITIES AND SERVICES. 14
16. INDEMNITY AND EXCULPATION. 15
17. INSURANCE. 15
18. ALTERATIONS. 17
19. MECHANICS' LIENS. 18
20. DESTRUCTION. 18
21. CONDEMNATION. 19
22. ASSIGNMENT. 20
23. DEFAULT. 22
24. ADVERTISING. 25
25. NO PUBLIC DISCLOSURES. 25
26. LANDLORD'S ENTRY ON PREMISES. 26
27. OFFSET STATEMENT, ATTORNMENT, SUBORDINATION. 26
28. NOTICE. 27
29. WAIVER. 27
30. SALE OR TRANSFER OF PREMISES. 28
31. HOLDING OVER. 28
32. SURRENDER OF PREMISES. 28
33. ABANDONMENT. 29
34. ATTORNEYS' FEES. 29
35. ACCESS; CHANGES IN BUILDING FACILITIES; NAME. 29
36. QUIET ENJOYMENT. 29
37. FORCE MAJEUR. 29
38. RELATIONSHIP OF PARTIES. 30
39. GENERAL PROVISIONS. 30
NET INDUSTRIAL LEASE
This Lease between NONAR ENTERPRISES, a California general partnership
("Landlord"), and IPAC PRECISION MACHINING, INC., a California corporation
("Tenant"), executed as of November 18, 2000.
1. LEASE OF PREMISES.
1.1. In consideration of the Rent (as defined in the Article titled "Rent")
and the provisions of this Lease, Landlord leases to Tenant and Tenant leases
from Landlord the Premises described in the Article titled "Definitions." The
Premises are located within the Building described in the Article titled
"Definitions." Tenant shall have the non-exclusive right (unless otherwise
provided herein) in common with Landlord, other tenants, subtenants and
invitees, to use of the Project Enhancement Areas And Unit Shared Use Areas (as
defined in the Article titled "Definitions").
1.2. Tenant has examined the Premises and is fully informed of their
condition.
1.3. This Lease confers no rights either with regard to the subsurface of
the land below the ground level of the Premises or with regard to airspace above
the top of the roof of the building that is a part of the Premises.
2. EXHIBITS AND ADDENDA.
The exhibits and addenda listed below (unless lined out) are incorporated by
reference in this Lease:
2.1. Exhibit "A" - Site Plan designating the Premises, Building, Unit and
Project Enhancement Areas.
2.2. Exhibit "B" - Rules and Regulations.
2.3. Exhibit "C" - Floor Plan and Tenant Improvements to the Premises.
2.4. Exhibit "D" - Hazardous Materials Addendum.
3. DEFINITIONS
As used in this Lease, the following terms shall have the following meanings:
3.1. Base Rent: Commencing November 18, 2000, the Base Rent shall be $
29,441.00 per month.
3.2. Building: The building in the Project containing the Premises.
3.3. Commencement Date: November 18, 2000.
3.4. Cost of Living Adjustment Range: Minimum 3 % Maximum 3 %.
3.5. Expiration Date: June 30, 2008, unless otherwise sooner terminated in
accordance with the provisions of this Lease.
3.6. Landlord's Mailing Address: NONAR ENTERPRISES
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Partner
3.7. Tenant's Mailing Address: IPAC PRECISION MACHINING, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
3.8. Operating Expenses: All direct costs of operation and maintenance, as
determined by standard accounting practices, including, but not limited to,
Common Area expenses, real property taxes, insurance, maintenance, repairs,
utilities, management fees, pest control, services and reserves.
3.9. Parking:Tenant shall be permitted to park One Hundred (100) cars on a
non-exclusive basis in the area(s) designated by Landlord for parking.
3.10. Premises: That portion of the Project located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, Suite A containing approximately 58,382 square feet
of Rentable Area, shown by diagonal lines on Exhibit "C." Landlord does not
purport to represent this figure as an accurate measurement. Measurements are
to the drip-line of the exterior walls and include a pro-rata share of the
electric meter room.
3.11. Project: A multi-tenant industrial/office/commercial real property
development of Landlord and Landlord's affiliates located in Vista, California.
The Project includes the land, the buildings and all other improvements located
thereon, including the Project Enhancement Areas And The Unit Shared Use Areas.
The Project is known as the Rancho Vista Business Park
3.12. Project Enhancement Areas: Specific areas of one or more lots within
the Project which have been designated to be used for the enhancement of the
Project. Project Enhancement Areas may include, but are not limited to,
landscaped areas containing lighted monument signs for the Project.
3.13. Project Enhancement Area Expenses: All direct costs of operation and
maintenance of the Project Enhancement Areas, as determined by standard
accounting practices, including, but not limited to, electrical lighting for
Project monument signs, water for landscaping, landscape maintenance and repair
and reserves.
3.14. Rentable Area: As to the Premises, the measurements of floor area as
may, from time to time, be subject to lease by Tenant and all tenants of the
Building respectively, as determined by Landlord and applied on a consistent
basis throughout the Building.
3.15. Security Deposit (See the Article titled "Security Deposit"): $
29,441.00. The portion of the Security Deposit which shall be designated as a
Cleaning Deposit shall be $2,944.10.
3.16. Tenant's First Adjustment Date (See the Article titled "Rent"):
December 1, 2001.
3.17. Tenant's Pro Rata Share of the Building: Tenant's Pro Rata Share of
the Building is a fraction, the numerator of which is the Rentable Area of the
Premises (as determined by Landlord), and the denominator of which is the total
Rentable Area of all tenants in the Building (as determined by Landlord). If
Rentable Area is added to or removed from the Building, Landlord shall
recalculate the fractions described in this Section for purposes of this Lease.
3.18. Tenant's Pro Rata Share of the Project: Such share is calculated as
follows: Tenant's Pro Rata Share of the Building times a fraction, the numerator
of which is the gross square footage of the lot on which the Premises is located
(as determined by Landlord), and the denominator of which is 2,617,630 (the
total gross square footage of the Project). If land is added to or removed from
the Project, Landlord shall recalculate the total gross square footage of the
Project for purposes of this Lease.
3.19. Tenant's Pro Rata Share of the Unit: Such share is calculated as
follows: Tenant's Pro Rata Share of the Building times a fraction, the numerator
of which is the gross square footage of the lot on which the Premises is
located, and the denominator of which is the total gross square footage of all
the lots in the Unit, as determined by Landlord from time to time. If land is
added to or removed from the any of the lots in the Unit, Landlord shall
recalculate the total gross square footages of the lots and the corresponding
fractions for purposes of this Lease.
3.20. Tenant's Use Clause (See the Article titled "Use, Limitations"):
Precision sheet metal and related activities.
3.21. Term: The period commencing on the Commencement Date and expiring at
midnight on the Expiration Date.
3.22. Trade Name: IPAC AND NMT.
3.23. Unit: A portion of the Project consisting of one or more lots and one
or more Buildings, one of which contains the Premises, as designated on the Site
Plan attached hereto as Exhibit "A".
3.24. Unit Shared Use Area: All areas of a lot within the Unit except for
Buildings and Exclusive Use Areas, if any.
3.25. Unit Shared Use Area Expenses: All direct costs of operation and
maintenance of the Unit Shared Use Areas of the Unit, as determined by standard
accounting practices, including, but not limited to, exterior lighting, exterior
water, landscape maintenance and repair, ▇▇▇▇▇▇, parking lot maintenance and
repair, trash collection services and reserves.
3.26. Miscellaneous Definitions:
ALTERATION: any addition or change to, or modification of, the Premises made by
Tenant after the fixturing period, including, without limitation, fixtures, but
excluding trade fixtures, and Tenant Improvements.
AUTHORIZED REPRESENTATIVE: any officer, agent, employee, or independent
contractor retained or employed by either Party, acting within authority given
him by that Party.
CLAIMS: all claims, actions, demands, liabilities, damages, costs, penalties,
forfeitures, losses or expenses, including, without limitation, reasonable
attorneys' fees and the costs and expenses of enforcing any indemnification,
defense or hold harmless obligation under the Lease.
COMMENCEMENT DATE MEMORANDUM: the form of memorandum attached to the Lease.
DAMAGE: injury, deterioration, or loss to a person or property caused by
another person's acts or omissions. Damage includes death.
DAMAGES: a monetary compensation or indemnity that can be recovered in the
courts by any person who has suffered damage to his person, property, or rights
through another's act or omission.
DESTRUCTION: any damage to or disfigurement of the Premises.
DOMESTIC WATER: metered water service to the interior of the Building.
ENCUMBRANCE: any deed of trust, mortgage, or other written security device or
agreement affecting the Premises, and the note or other obligation secured by
it, that constitutes security for the payment of a debt or performance of an
obligation.
EXPIRATION: the coming to an end of a time period specified in the Lease,
including, without limitation, any extension of the term resulting from the
exercise of an option to extend.
GOOD CONDITION: the good physical condition of the Premises and each portion of
the Premises, including, without limitation, signs, windows, show windows,
appurtenances, and Tenant's personal property. "In good condition" means
first-class, neat, clean, and broom-clean, and is equivalent to similar phrases
referring to physical adequacy in appearance and for use.
HOLD HARMLESS: to defend and indemnify from all liability, losses, penalties,
damages, costs, expenses (including, without limitation, attorneys' fees),
causes of action, claims, or judgments arising out of or related to any damage,
as defined hereinabove, to any person or property.
LANDLORD PARTIES: Landlord and Property Manager and their respective officers,
directors, partners, shareholders, members and employees.
LAW: any law, judicial decision, statute, constitution, ordinance, resolution,
regulation, rule, administrative order, direction, or other requirement of any
municipal, county, state, federal, or other government agency or authority
having jurisdiction over the Parties, Project, Building, or the Premises in
effect either at the time of execution of the Lease or at any time during the
term, including, without limitation, any regulation or order of a quasi-official
entity or body (e.g., board of fire examiners or public utilities). The
reference in this Lease to any legislation or any portion thereof shall be read
as though the words "or any statutory modifications or re-enactment thereof or
any statutory provisions substituted thereof" were added to such reference.
LENDER: the beneficiary, mortgagee, secured Party, or other holder of an
encumbrance, as defined hereinabove.
LIEN: a charge imposed on the Premises by someone other than Landlord, by which
the Premises are made security for the performance of an act. Most of the liens
referred to in this Lease are mechanics' liens.
Maintenance: repairs, replacement, repainting, and cleaning.
MORTGAGE: any mortgage, deed of trust, security interest or other security
document of like nature that at any time may encumber all or any part of the
Project and any replacements, renewals, amendments, modifications, extensions or
refinancings thereof, and each advance (including future advances) made under
any such instrument.
PARTY: shall mean Landlord or Tenant; and if more than one person or entity is
Landlord or Tenant, the obligations imposed on that Party shall be joint and
several.
PERSON: one or more human beings, or legal entities or other artificial
persons, including, without limitation, partnerships, corporations, trusts,
estates, associations, and any combination of human beings and legal entities.
PROPERTY MANAGER: An agent Landlord may appoint from time to time to manage the
Project. Property Manager is authorized to manage the Project. Landlord
appointed Property Manager to act as Landlord's agent for leasing, managing, and
operating the Project. The Property Manager then serving is authorized to
accept service of process and to receive and give notices and demands on
Landlord's behalf.
PROVISION: any term, agreement, covenant, condition, clause, qualification,
restriction, reservation, or other stipulation in the Lease that defines or
otherwise controls, establishes, or limits the performance required or permitted
by either Party.
RESTORATION: the reconstruction, rebuilding, rehabilitation, and repairs that
are necessary to return destroyed portions of the Premises and other property to
substantially the same physical condition in which they were immediately before
the destruction.
SUCCESSOR: assignee, transferee, personal representative, heir, or other person
or entity succeeding lawfully, and pursuant to the provisions of this Lease, to
the rights or obligations of either Party.
TENANT: a person or entity (or their successor in interest) who has signed a
valid existing lease for a space in the Project.
TENANT IMPROVEMENTS: any addition to or modification of the Premises made by or
for Tenant before, at, or near the commencement of the term, including, without
limitation, fixtures (not including Tenant's trade fixtures).
TENANT'S PERSONAL PROPERTY: Tenant's equipment, furniture, merchandise, and
movable property placed in the Premises by Tenant, including Tenant's trade
fixtures.
TENANT'S TAXES: Any and all taxes, assessments, levies, fees, and other
governmental charges of every kind or nature levied or assessed by municipal,
county, state, federal, or other taxing or assessing authorities with respect
to: all furniture, fixtures, equipment, and any other personal property of any
kind owned by Tenant and placed, installed, or located within, upon, or about
the Premises to the extent that the property tax on such property is assessed
directly to Landlord; all alterations of whatsoever kind or nature, if any, made
by or for Tenant to the Premises after the execution of this Lease; and the
leasehold interest of Tenant. Tenant's Taxes shall also include taxes
irrespective of whether any of the items are assessed as real or personal
property and irrespective of whether any of such items or taxes are assessed to
or against Landlord or Tenant.
TENANT'S TRADE FIXTURES: any property installed in or on the Premises by Tenant
for purposes of trade, manufacture, ornament, or related use.
TERMINATION: the ending of the term before expiration for any reason.
4. DELIVERY OF POSSESSION.
4.1. If for any reason Landlord does not deliver possession of the Premises
to Tenant on the Commencement Date, Landlord shall not be subject to any
liability for such failure, the Expiration Date shall not change, the validity
of this Lease shall not be impaired, this Lease shall be neither void nor
voidable, but Rent shall be abated until delivery of possession.
4.2. If Landlord permits Tenant to enter into possession of the Premises
before the Commencement Date, such possession shall be subject to the provisions
of this Lease, including, without limitation, the payment of Rent.
4.3. If the delay in delivery of the Premises is the result of Tenant's
delay, the Commencement Date shall not be delayed by the number of days of such
Tenant delay and, for purposes of Tenant's obligation to pay rent, the
Commencement Date shall be deemed to have occurred on the date that the Premises
would have been ready for occupancy but for the Tenant delay. In the event
Tenant requests not to initially improve certain areas of the Premises, the
Commencement Date for those areas will be the same as the improved Premises.
4.4. Tenant's occupancy of the Premises conclusively establishes that
Landlord completed improvements, if any, in a manner satisfactory to Tenant and
constitutes Tenant's waiver and release of any and all rights, benefits, claims
or warranties available to Tenant under this Lease, at law or in equity in
connection with such improvements.
5. ACCEPTANCE.
5.1. By taking possession, Tenant acknowledges that Premises are in good
condition.
5.2. The taking of possession or use of the Premises by Tenant for any
purpose other than construction shall conclusively establish that the Premises
and the Project were, at such time, in satisfactory condition (except for latent
defects) and in conformity with the provisions of this Lease in all respects,
excepting only items of which Tenant shall give Landlord written notice in
reasonable detail within fifteen (15) days after Tenant takes such possession or
commences such use of the Premises or the term of this Lease otherwise
commences.
5.3. Tenant acknowledges that neither Landlord nor any agent of Landlord has
made any representation or warranty with respect to the Premises or the Project
or with respect to their suitability or fitness for the conduct of Tenant's
business or for any other purpose.
6. USE, LIMITATIONS.
6.1. Tenant shall use the Premises solely for the purposes set forth in the
Tenant's Use Clause and for no other use without Landlord's prior written
consent. Landlord may grant or withhold consent at its sole discretion.
6.2. Tenant shall conduct its business at the Premises under the trade name
set forth in the Tenant's Trade Name Clause and under no other trade name unless
first obtaining the written consent of Landlord. Landlord may grant or withhold
consent at its sole discretion.
6.3. Tenant shall not do, bring, or keep anything in or about the Premises
that will cause a cancellation of any insurance covering the Premises or its
contents. If the rate of any insurance carried by Landlord is increased as a
result of Tenant's use, Tenant shall pay to Landlord within ten (10) days before
the date Landlord is obligated to pay a premium on the insurance, or within ten
(10) days after Landlord delivers to Tenant a certified statement from
Landlord's insurance carrier stating that the rate increase was caused by an
activity of Tenant on the Premises, as permitted in this Lease, whichever date
is later, a sum equal to the difference between the original premium and the
increased premium.
6.4. Tenant shall comply with any master Covenants, Conditions and
Restrictions and/or any Declaration of Restrictions that may encumber the real
property on which the Premises are located.
6.5. Tenant shall comply with all Laws concerning the Premises or Tenant's
use of the Premises, including, without limitation, the obligation at Tenant's
cost to alter, maintain, change, or restore the Premises in compliance and
conformity with all Laws relating to the condition, use, or occupancy of the
Premises during the term. Tenant will also comply with the requirements of any
fire insurance underwriters or other similar body now or hereafter constituted
relating to or affecting the conditions, use, or occupancy of the Premises.
Tenant agrees to install at its sole cost and expense any improvements, changes,
or alterations authorized in writing by Landlord and required by any
governmental authority as a result of Tenant's use of the Premises or its manner
of operation or any alterations made by Tenant. If Tenant contests the validity
or application of any Law or other requirement of any governmental authority,
Tenant shall furnish a bond as required by Landlord and shall protect, defend,
hold harmless, and indemnify Landlord and the Project to the satisfaction of
Landlord from and against all claims, losses, damages, costs, expenses, and
liabilities arising from any such contest, including attorneys' fees incurred by
Landlord in monitoring Tenant's compliance.
6.6. Tenant shall not do or permit anything to be done in or about the
Premises that will, in any way, unreasonably obstruct or interfere with the
rights of other tenants or occupants of the Project or materially injure them.
Tenant shall not use the Premises in any manner that will cause, maintain,
permit, or constitute waste, nuisance, or an unreasonable annoyance to the quiet
enjoyment of the tenants of the Building (including, without limitation, the use
of loudspeakers or sound or light apparatus that can be heard or seen outside
the Premises). Tenant shall not allow the Premises to be used for any unlawful
purpose.
6.7. Tenant shall not use the Premises for sleeping, washing clothes,
cooking, or the preparation, manufacture, or mixing of anything that might emit
any odor or objectionable noises or lights.
6.8. Tenant shall not, without the prior written consent of the Landlord:
use any apparatus or device in or about the Premises that will change the
temperature otherwise maintained by the air conditioning or heating system;
increase the amount of electricity or water, if any, usually furnished or
supplied for use of the Premises, Building, or Project for the use described in
the Tenant's Use Clause; nor connect with electric current, except through
existing electrical outlets in the Premises, or water pipes, any apparatus or
device for the purposes of using electric current or water.
6.9. Tenant shall not do or permit anything on the Premises that will cause
damage to the Premises. Any overloading of electrical circuits shall be the
responsibility of Tenant. No machinery, apparatus, or other appliance shall be
used or operated in or on the Premises that will in any manner injure, vibrate,
or shake the Premises. Landlord reserves the right to prescribe the weight and
position of all files, safes, and heavy equipment that Tenant desires to place
in the Premises so as to properly distribute weight. Tenant's business machines
and mechanical equipment that cause vibration or noise that may be transmitted
to the Building structure or to any other space in the Building or Project shall
be so installed, maintained, and used by Tenant as to eliminate such vibration
or noise. Tenant shall be responsible for all structural engineering required to
determine structural load.
6.10. Tenant shall not display or sell merchandise or allow carts, portable
signs, devices or other objects to be stored or remain outside the defined
exterior and permanent doorways of the Premises.
6.11. After opening for business, Tenant shall continuously remain open for
business at least those days and hours as is customary for a business of a like
character in the city in which the Premises are situated.
6.12. Tenant shall not conduct or permit any sale by auction on the
Premises.
6.13. Tenant shall have for its use and benefit the non-exclusive right in
common with Landlord and future owners, other tenants and their agents,
employees, customers, licensees, subtenants, invitees, and all others to whom
Landlord has granted or may grant such rights, to use the Unit Shared Use Areas
during the entire term of this Lease, or any extension thereof, for ingress and
egress, roadway, automobile parking and sidewalks. However, Landlord shall, at
all times, have the right and privilege of determining the nature and extent of
the Unit Shared Use Areas and of making such changes which in its opinion are
deemed to be desirable. Such changes may include, but shall not be limited to
the following: Converting Unit Shared Use Areas into leasable areas; adding
additional buildings and improvements on the land or on adjacent land, which may
share access, Project Enhancement Areas And Unit Shared Use Areas, and parking
facilities; constructing additional parking facilities in the Unit Shared Use
Areas; increasing or decreasing Unit Shared Use Area land and/or facilities;
changing the location, , number, size, and shape of driveways, entrances, exits,
lobbies, automobile parking spaces, parking areas, loading and unloading areas,
ingress, egress, landscaped areas, walkways, the direction and flow of traffic,
(provided such changes shall not unreasonably restrict or prevent Tenant from
having proper access to the Premises for loading, parking or other normal day to
day operations); installation of prohibited areas, landscaped areas, and all
other facilities thereof. Tenant acknowledges that such activities may result
in occasional inconvenience to Tenant. Landlord reserves the right from time to
time to close temporarily any of the Unit Shared Use Areas for maintenance
purposes so long as reasonable access to the Premises is available. Nothing
contained herein shall be deemed to create any liability upon Landlord as a
result of said changes or for any damage to motor vehicles of customers or
employees or for loss of property from within such motor vehicles, unless caused
by the negligence of Landlord, its agents, servants or employees. Any changes
in the Unit Shared Use Area land and/or facilities shall not entitle Tenant to
any compensation or diminution or abatement of rent, nor shall any diminution
of such areas be deemed constructive or actual eviction. All Unit Shared Use
Areas and facilities not located within the Premises, which Tenant may be
permitted to use and occupy, pursuant to this Lease, are to be used and occupied
under a revocable license.
6.14. Landlord reserves the right from time to time to install, use,
maintain, repair and replace pipes, ducts, conduits, wires and appurtenant
meters and equipment for service to other parts of the Project above the ceiling
surfaces, below the floor surfaces, within the walls and in central core areas,
and to relocate any pipes, ducts, conduits, wires and appurtenant meters and
equipment included in the Premises that are located in the Premises or located
elsewhere outside the Premises, and to expand the Project.
6.15. Landlord shall, at all times during the term of this Lease, have the
sole and exclusive control of the Unit Shared Use Areas, and may, at any time
during the term hereof, exclude and restrain any person from use or occupancy
thereof, excepting, however, bona fide customers, patrons and service-suppliers
of Tenant, and other tenants of Landlord who make use of such areas in
accordance with the rules and regulations established by Landlord from time to
time with respect thereto. The rights of Tenant hereunder, in and to the Unit
Shared Use Areas, shall, at all times, be subject to the rights of Landlord,
other tenants of the Building and all others to whom Landlord has granted such
rights, to use the same in common with Tenant. Tenant shall not, at any time,
interfere with the rights of Landlord, other tenants, or any other person
entitled to use the Unit Shared Use Areas. It shall be the duty of Tenant to
keep all Unit Shared Use Areas free and clear of any obstructions created or
permitted by Tenant or resulting from Tenant's operation and to permit the use
of any of the parking and roadway access areas only for normal parking and
ingress and egress by the such customers, patrons and service-suppliers to and
from the Building.
6.16. If, in the opinion of Landlord, unauthorized persons are using any
Unit Shared Use Areas by reason of the presence of Tenant in the Premises,
Tenant, upon demand of Landlord, shall enforce Landlord's rights against all
such unauthorized persons by appropriate proceedings. Nothing herein shall
affect the rights of Landlord, at any time, to remove any such unauthorized
persons from the Unit Shared Use Areas or to restrain the use of any of the Unit
Shared Use Areas by unauthorized persons.
6.17. Tenant agrees to comply with such reasonable rules and regulations
(the "Rules and Regulations") in the use of the Premises and the Unit Shared Use
Areas as Landlord may adopt from time to time for the orderly and proper
operation of the Project. Tenant shall use its best efforts to cause others who
use the Unit Shared Use Areas with Tenant's express or implied permission to
abide by Landlord's Rules and Regulations. Landlord shall not be responsible to
Tenant for the non-performance by any other tenant or occupant of the Project of
any of such Rules and Regulations. Such Rules and Regulations may include, but
are not limited to, the following:
6.17.1. Normal business hours;
6.17.2. Hours during which the Common Areas shall be open for use;
6.17.3. The restricting of employee parking to a limited, designated area or
areas and the imposition of fines for violations of such restrictions or
designations; and
6.17.4. The regulation of removal, storage, and disposal of Tenant's refuse
and other rubbish.
6.18. Tenant shall make a reasonable inspection as to the existence of any
Hazardous Substances on the Premises prior to the commencement of the Lease as
necessary to satisfy itself as to the condition of the Premises.
6.19. Tenant, at its sole cost and expense, will comply with all Hazardous
Substances Laws (including, but not limited to any federal, state or local
statutes, laws, ordinances or regulations in effect either at the time of
execution of the Lease or at any time during the term, that control, classify,
regulate, list or define Hazardous Substances) and prudent industry storage
practice relating to the presence, treatment, storage, transportation, disposal,
release or management of Hazardous Substances in, on, under or about the
Project. Tenant shall not enter into any settlement agreement, consent decree or
other compromise with respect to any Claims relating to or in any way connected
with Hazardous Substances in, on, under or about the Project, without first
notifying Landlord of Tenant's intention to do so and affording Landlord
reasonable opportunity to investigate, appear, intervene and otherwise assert
and protect Landlord's interest in the Project.
6.20. Tenant shall not cause or permit any Hazardous Substance to be used,
stored, generated, or disposed of on or in the Premises by Tenant, Tenant's
agents, employees, contractors, or invitees without first obtaining Landlord's
written consent. If Hazardous Substances are used, stored, generated, or
disposed of on or in the Premises except as permitted above, or if the Premises
become contaminated in any manner for which Tenant is legally liable, Tenant
shall indemnify, defend and hold harmless the Landlord from any and all claims,
damages, fines, judgments, penalties, costs, liabilities, or losses (including,
without limitation, a decrease in value of the Premises, damages caused by loss
or restriction of rentable or usable space, or any damages caused by adverse
impact on marketing of the space, and any and all sums paid for settlement of
claims, litigation expenses, attorneys' fees, consultant, and expert fees) of
whatever kind or nature, known or unknown, contingent or otherwise, arising
during or after the Lease term and arising as a result of that contamination by
Tenant. This indemnification includes, without limitation, any and all costs
incurred because of any investigation of the site or any cleanup, removal, or
restoration mandated by a federal, state, or local agency or political
subdivision. Without limitation of the foregoing, if Tenant causes or permits
the presence of any Hazardous Substance on the Premises and that results in
contamination, Tenant shall promptly, at its sole expense, take any and all
necessary actions to return the Premises to the condition existing prior to the
presence of any such Hazardous Substance on the Premises. Tenant shall first
obtain Landlord's approval for any such remedial action. The provisions of this
Section shall be in addition to any other obligations and liabilities Tenant may
have to Landlord at law or equity and shall survive the transactions
contemplated herein and shall survive the termination of this Lease.
Notwithstanding the foregoing, Tenant may use nominal amounts of Hazardous
Substances as are normal and customary for conduct of its business, provided
that Tenant complies with all applicable Laws relating thereto.
6.20.1. As used herein, "Hazardous Substance" means any substance that is
toxic, ignitable, reactive, or corrosive and that is now or hereafter regulated
by any local or State government with jurisdiction over the Premises or Tenant,
or the United States Government. "Hazardous Substance" includes, but is not
limited to, any and all material or substances that are defined as "hazardous
waste," "extremely hazardous waste," or a "hazardous substance" pursuant to Law.
"Hazardous Substance" includes, but is not limited to, petroleum based products,
paints and solvents, lead, cyanide, DDT, printing inks, acids, asbestos, PCB's,
contaminants, toxic wastes, toxic pollutants, dredged soil, solid waste,
pesticides, herbicides, fertilizers and other agricultural chemicals or wastes,
incinerator residue, sewage, garbage, sewage sludge, munitions, chemical
products and wastes, and any other liquid, solid or gaseous pollutants or
hazardous substances or wastes which are or may become subject to regulation
under any State or Federal environmental protection law or regulation.
6.20.2. Any Hazardous Substance permitted on the Premises as provided above,
and all containers therefor, shall be used, kept, stored, and disposed of in a
manner that complies with all Laws applicable to this Hazardous Substance.
6.20.3. Tenant shall not discharge, leak, or emit, or permit to be
discharged, leaked, or emitted, any material into the atmosphere, ground, sewer
system, or any body of water, if that material (as is reasonably determined by
the Landlord, or any governmental authority) does or may pollute or contaminate
the same, or may adversely affect (a) the health, welfare, or safety of persons,
whether located on the Premises or elsewhere, or (b) the condition, use or
enjoyment of the building or any other real or personal property. Tenant shall
immediately notify Landlord of any release of any Hazardous Substance on or near
the Premises whether or not such release is in a quantity that would otherwise
be reportable to a public agency and shall also comply with the notification
requirements of California Health & Safety Code section 25359.7.
6.20.4. At the commencement of each Lease Year, Tenant shall disclose to
Landlord the names and approximate amounts of each and every Hazardous Substance
that Tenant intends to store, use, or dispose of on the Premises in the coming
Lease Year. In addition, at the commencement of each Lease Year, beginning with
the second Lease Year, Tenant shall disclose to Landlord the names and amounts
of all Hazardous Substances that were actually used, stored, or disposed of on
the Premises if those materials were not previously identified to Landlord at
the commencement of the previous Lease Year.
6.21. Tenant shall notify Landlord of any of the following actions affecting
Landlord, Tenant, or the Project that result from or in any way relate to
Tenant's use of the Project immediately after receiving notice of the same: (a)
any enforcement, clean-up, removal or other governmental or regulatory action
instituted, completed or threatened under any Hazardous Substances Law; (b) any
Claim made or threatened by any person relating to damage, contribution,
liability, cost recovery, compensation, loss or injury resulting from or claimed
to result from any Hazardous Substance; and (c) any reports made by any person,
including Tenant, to any environmental agency relating to any Hazardous
Substance, including any complaints, notices, warnings or asserted violations.
Tenant will also deliver to Landlord, as promptly as possible and in any event
within five business days after Tenant first receives or sends the same, copies
of all Claims, reports, complaints, notices, warnings or asserted violations
relating in any way to the Premises or Tenant's use of the Premises. Upon
Landlord's written request, Tenant will promptly deliver to Landlord
documentation acceptable to Landlord reflecting the legal and proper disposal of
all Hazardous Substances removed or to be removed from the Premises. All such
documentation will list Tenant or its agent as a responsible party and will not
attribute responsibility for any such Hazardous Substances to Landlord or
Property Manager.
6.22. Tenant acknowledges and agrees that all reporting and warning
obligations required under Hazardous Substances Laws resulting from or in any
way relating to Tenant's use of the Premises or Project are Tenant's sole
responsibility, regardless whether the Hazardous Substances Laws permit or
require Landlord to report or warn.
6.23. Tenant shall obtain proper permits from the City of Vista, the Fire
Department, and any other government agencies necessary to operate its business
at this location. In the event any of these agencies require building
modifications to adapt the building to Tenant's current or future use, Tenant
shall make such modifications at Tenant's sole expense.
6.24. Landlord shall, at an interval determined at Landlord's discretion,
monitor Tenant's program and efforts to manage and control Hazardous Substances
and conduct inspections that it deems proper to determine whether any
contamination has taken place. If contamination caused by Tenant is discovered
through such monitoring and inspection, the following program shall be
instituted at Tenant's expense:
6.25. A low-level geotechnical reconnaissance shall be conducted to
determine soil classification, depth of ground water, nearest drinking water
aquifer, direction of ground water flow.
6.26. Based on the result of this inspection, three (3) to (6) ground water
monitor ▇▇▇▇▇ shall be placed at strategic points on the Premises or other
appropriate locations in the Project. These are ▇▇▇▇▇ shall use specially
prepared PVC and stainless steel pipes and fittings as recommended by the
testing engineers or technicians.
6.27. A "background analysis" of the site shall then be conducted for
"priority pollutants." This analysis establishes the pollutants present in the
soil and ground water at the beginning of the monitoring period. This analysis
should be maintained on file by Landlord and Tenant for future reference and
comparison.
6.28. Every three (3) years, or such other interval as may be recommended by
the testing engineers or technicians, an analysis shall be made of the ground
water drawn from the monitoring ▇▇▇▇▇ to determine if new or increased
pollutants are present in the ground water. Analysis shall be conducted by an
industrial environmental laboratory using a spectrometer and other appropriate
analytical processes.
6.29. If, on the basis of this testing procedure it is determined that there
is continued pollution of the Premises, Tenant shall immediately take steps as
required, at Tenant's sole expense, to contain, clean up, and discontinue the
contamination of the soil and/or groundwater.
6.30. Regular monitoring of the ground water shall then continue for the
duration of the lease period.
6.31. The discovery of Hazardous Substances on the Premises shall not
constitute grounds for recision or termination of the Lease by the Tenant, nor
for offset against, or abatement of, any rents due under the terms of the Lease.
7. RENT.
7.1. All costs and expenses that Tenant assumes or agrees to pay to Landlord
under this Lease shall be deemed additional rent (that together with Base Rent
is at times referred to herein as the "Rent"). Tenant shall pay the Rent in
lawful money of the United States of America to Landlord without deduction,
setoff, prior notice, or demand. Rent is due on or before the first day of each
month, commencing on the Commencement Date and continuing during the Term. Base
Rent for the first month or portion of it shall be paid upon execution of this
Lease. Base Rent for any partial month shall be prorated at the rate of 1/30th
of the Base Rent per day. Thereafter rent shall be payable in accordance with
the terms of this Section. The total consideration for the term of this Lease
shall be increased by the amount of any such prorated installment hereby
required. All rent shall be paid to Landlord at the address provided at the
beginning of this Lease or at such other place as Landlord may from time to time
designate in writing.
7.2. Landlord shall have the right to accept all rent and other payments,
whether full or partial, and to negotiate checks and payments thereof without
any waiver of rights, irrespective of any conditions to the contrary that Tenant
seeks to impose. No security or guaranty that may now or later be furnished to
Landlord for the payment of Rent herein reserved or for performance by Tenant of
the other covenants or conditions of this Lease shall in any way be a bar or
defense to any action in unlawful detainer, or for the recovery of the Premises
or to any action that Landlord may at any time commence for a breach of any of
the covenants or conditions of this Lease.
7.3. The amount of Base Rent (and the corresponding Monthly Installments of
Base Rent) payable hereunder shall be adjusted annually (the "Adjustment Date"),
commencing on Tenant's First Adjustment Date. Adjustments, if any, shall be
based upon increases (if any) in the Index. The Index in publication three (3)
months before the Commencement Date shall be the "Base Index." On each
Adjustment Date, the Base Rent shall be increased by a percentage equal to the
percentage increase, if any, in the Index in publication three (3) months before
the Adjustment Date (the "Comparison Index") over the Base Index ("adjusted Base
Rent"). In the event the Comparison Index in any year is less than the
Comparison Index (or Base Index, as the case may be) for the preceding year, the
Base Rent shall remain the amount of Base Rent payable during that preceding
year. When the adjusted Base Rent payable as of each Adjustment Date is
determined, Landlord shall give Tenant written notice of such adjusted Base Rent
and the manner in which it was computed. The adjusted Base Rent shall
thereafter be the "Base Rent" for all purposes under this Lease. This Section
is subject to the Section titled "Cost of Living Adjustment Range".
7.3.1. If at any Adjustment Date the Index no longer exists in the form
described in this Lease, Landlord may substitute any substantially equivalent
official index published by the Bureau of Labor Statistics or its successor.
Landlord shall use any appropriate conversion factors to accomplish such
substitution. The substitute index shall then become the "Index" hereunder.
7.3.2. In no event shall the Base Rent be adjusted to reflect an increase
greater or lesser than the percentages (if any) described in the Cost of Living
Adjustment Range Clause.
7.3.3. Rent or any other sum not paid to Landlord when due shall bear
interest at the rate of 10% per annum from the date due until fully paid.
Paying such interest shall not excuse or cure any default by Tenant under this
Lease.
7.4. If this Lease terminates before the expiration date for reasons other
than Tenant's default, Base Rent shall be prorated to the date of termination,
and Landlord shall immediately repay to Tenant all Base Rent then prepaid and
unearned.
8. LATE CHARGES.
8.1. In the event any payment of rent or any other sum required hereby shall
not be paid within (5) business days after the same shall be due and payable, a
late charge by way of damages shall be immediately due and payable in addition
to the interest provided above. Tenant recognizes and acknowledges that default
in making, when due, payments of rent required hereby will result in Landlord
incurring additional costs and expenses. Such costs and expenses include, but
are not limited to, processing and accounting charges, legal costs, late charges
that may be imposed on Landlord by the terms of any encumbrance and note secured
by any encumbrance covering the Premises, loss to Landlord of the use of the
money due, and late charges that may be imposed on Landlord by the terms of any
mortgage or trust deed covering the Premises. Tenant hereby agrees that, in the
event of any such late payment, Landlord will be damaged and will be entitled to
compensation for these damages, but such damages are, and will continue to be
extremely difficult and impractical to ascertain for the following reasons: (i)
the damages to which Landlord will be entitled in a court of law will be based
on the difference between the actual value of rent on the Premises at the time
such payment is due and the rent for the Premises as set forth in this Lease
which difference must be based on opinions of rental value of the Premises which
can vary in significant amounts; and (ii) it is impossible to predict as of the
date on which this Lease is entered into whether the rental value of the
Premises will increase or decrease as of the date of any future payments, and
Tenant desires to limit the amount of damages for which Tenant might be liable
should Tenant fail to make any payment of rent required hereby. Tenant
therefore agrees (i) that a late charge equal to percent (5%) of each payment of
rent that becomes delinquent is a reasonable estimate of said damages to
Landlord and (ii) to pay said sum on demand.
8.2. Acceptance of any late charge, or any part thereof, shall not
constitute a waiver of Tenant's default with respect to the overdue amount, or
prevent Landlord from exercising any of the other rights and remedies available
to Landlord. Any late charge shall be deemed additional rent and collection
thereof shall be in addition to all of Landlord's other rights and remedies
hereunder or at law or in equity and shall be construed as liquidated damages or
as limiting Landlord's remedies in any manner. If rent is not received by the
due date, Landlord shall notify Tenant and Tenant shall, on demand of Landlord,
immediately cure the default by presentment of rent and late charge to Landlord.
8.3. Any payments of any kind returned for insufficient funds will be
subject to an additional handling charge of twenty-five dollars ($25.00).
8.4. Tax Allocation: For purposes of the Internal Revenue Code, Landlord and
Tenant hereby agree to allocate the stated rents provided herein to the periods
that correspond to the actual rent payments as provided under the terms and
conditions of this Lease.
9. SECURITY DEPOSIT.
9.1. On execution of this Lease, Tenant shall deposit with Landlord the
Security Deposit for the full and faithful performance by Tenant of the
provisions of this Lease. If Tenant is in default, Landlord can use, apply, or
retain the Security Deposit, or any portion of it, to cure the default, for the
payment of any other amount that Landlord may spend or become obligated to spend
by reason of Tenant's default, or to compensate Landlord for any loss or damage
sustained by Landlord resulting from Tenant's default. Tenant shall immediately
upon demand pay to Landlord a sum equal to the portion of the Security Deposit
expended or applied by Landlord as provided in this Section so as to maintain
the Security Deposit in the sum initially deposited with Landlord. It is
expressly agreed that the Security Deposit is not an advance rental deposit or a
measure of Landlord's damages in the case of Tenant's default. A portion of the
Security Deposit has been designated herein as a Cleaning Deposit. Said
Cleaning Deposit shall be non-refundable, and shall be used for cleaning the
Premises following the termination or expiration of this Lease. Tenant shall
remain liable for the cost of cleaning the Premises if such cost exceeds the
Cleaning Deposit. If Tenant is not in default at the expiration or termination
of this Lease, Landlord shall return the Security Deposit, less the amount of
the Cleaning Deposit, if any remains, to Tenant, less any amounts required to
restore the Premises to good condition and repair, including damage resulting
from the removal by Tenant of its trade fixtures or equipment. Landlord's
obligations with respect to the Security Deposit are those of a debtor and not a
trustee. Landlord can maintain the Security Deposit separate and apart from
Landlord's general funds or can commingle the Security Deposit with Landlord's
general and other funds. Landlord shall not be required to pay Tenant interest
on the Security Deposit. In addition, Landlord may, at Landlord's sole option,
require Tenant to, immediately upon demand, increase the amount of the Security
Deposit to an amount not to exceed the sum of (i) the then current Base Rent,
plus (ii) the equivalent of Tenant's Pro Rata Share of one month's estimated
Operating Expenses.
10. OPTION TO EXTEND.
10.1. Tenant shall have Two (2), Five (5)-year option(s) to extend this
Lease, subject to the following conditions precedent: (i) Tenant is not in
default under any of the terms hereof; and (ii) Tenant shall give Landlord
notice in writing at least six (6) months prior to the expiration of the initial
term, and the first extended term, that Tenant intends to extend the term. Each
extended term shall be subject to all of the terms and conditions of this Lease,
except that the amount of Base Rent for the first year of each such extended
term shall be adjusted to market rates for comparable space at the time the
extended term is to commence. The market rate shall be determined by agreement
of the parties. The extended term shall be subject to all of the terms and
conditions of this Lease, except that the amount of Base Rent for each year
after the first year of each such extended term shall be increased three percent
(3%) annually over the previous years Base Rent.
11. ADDITIONAL SPACE - RIGHT OF FIRST REFUSAL.
11.1. If, during the Term of this Lease, Landlord receives an offer from
someone (the "Offerer") other than Tenant to lease the area of the Building
known as Suite "B" (referred to herein as the "Additional Space") Landlord shall
notify Tenant of such offer. Within seventy-two (72) hours after Landlord gives
such notice, Tenant may elect, in writing sent to Landlord, to lease the
Additional Space on the same terms as are contained in such offer. If Tenant
fails to make such election in writing within the time specified herein,
Tenant's rights, as set forth in this Article, shall not apply, and Landlord
shall have the right to proceed to lease the Additional Space to the Offerer.
12. OPERATING EXPENSES.
12.1. For purposes of this Lease, Operating Expenses shall mean all direct
costs paid or incurred in connection with the operation, management, repair, and
maintenance, as determined by standard accounting practices, including, but not
limited to: Common Area expenses; real property taxes and assessments and any
taxes or assessments hereafter imposed in lieu thereof; rent taxes, gross
receipt taxes (whether assessed against Landlord or assessed against Tenant and
paid by Landlord, or both); water and sewer charges; accounting, audit,
verification, legal and other consulting fees (but excluding legal fees in
connection with a dispute between Landlord and any tenant); the net cost and
expense of insurance for which Landlord is responsible hereunder or which
Landlord or any first mortgagee with a lien affecting the Building reasonably
deems necessary in connection with the Building; maintenance; repairs; utilities
and utilities surcharge; management fees; pest control, janitorial, and security
services; reserves, any and all assessments Landlord must pay for the Building
pursuant to any covenants, conditions or restrictions and agreements affecting
the Building or the Project; any costs levied, assessed or imposed by, or at the
direction of, regional, municipal, or local government authority in connection
with the use or occupancy of the Building or the Premises or the parking
facilities serving the Building or the Premises, including required traffic
management and fire safety programs and the Americans With Disabilities Act; the
cost (amortized over such reasonable period as Landlord shall determine together
with interest at the rate of Landlord's financing of such improvements or at a
rate allowed by Law on the unamortized balance) of any capital improvements made
to the Project or the Common Areas by the Landlord or replacement of any
building equipment (a) needed to operate the Building or the Common Areas as
required by any federal, state, regional, municipal, or local governmental
authority, (b) installed as a labor-saving device or to effect other economies
in the operation or maintenance of the Building, or (c) needed periodically to
maintain the appearance of the Building and its quality; costs incurred in the
management of the Building including supplies, wages, salaries, payroll
expenses, taxes and similar governmental charges with respect thereto of
employees used in the management, repair, operation, and maintenance of the
Building; Project or Building management office rental; a market rate management
fee; air conditioning, waste disposal, utility systems, mechanical systems,
heating, ventilating, and elevator maintenance costs; supplies, materials,
equipment, and tools; costs of maintaining the plumbing, heating, ventilating,
air conditioning, and electrical systems installed or furnished by Landlord;
depreciation of the cost of acquiring or the rental value of personal property
used in maintenance, and all other upkeep of Common Areas; costs and expenses of
gardening, landscaping, and interior plant service; maintenance of signs (other
than Tenant's signs); personal property taxes levied on or attributable to
personal property used in connection with the Building, including the Common
Areas; costs and expenses of resurfacing, repairing, maintenance, painting,
lighting, cleaning, refuse removal, security, and similar items, including
appropriate reserves for the parking garage; and, appropriate reserves to
provide for maintenance, repair and replacement of improvements in the Building
as determined by Landlord based on annual projections of such costs.
12.2. Tenant shall pay to Landlord, as additional rent, Tenant's Pro Rata
Share of such Operating Expenses in the following manner:
12.2.1. Tenant shall pay to Landlord, as additional rent, on the first day
of each calendar month of the term of this Lease, an amount equal to Landlord's
best estimate (based on Landlord's budgeted figures) of Tenant's monthly Pro
Rata Share of the Operating Expenses.
12.2.2. Within ninety (90) days following the end of each calendar year,
Landlord shall furnish Tenant with a statement covering the calendar year just
expired (certified as correct by an authorized representative of Landlord, or if
requested by a majority of the tenants in the Building by a certified public
accountant) showing (i) the total Operating Expenses; (ii) the amount of
Tenant's Pro Rata Share of such Operating Expenses for such calendar year; and
(iii) the payments made by Tenant with respect to such period as set forth in
this Article. If Tenant's payments exceed Tenant's Pro Rata Share of such
Operating Expenses, Tenant shall be entitled to offset the excess against the
next payments due Landlord as set forth in this Article. However, if Tenant's
Pro Rata Share of such Operating Expenses exceeds Tenant's payments, Tenant
shall pay Landlord the deficiency within ten (10) days after receipt of such
statement. In addition, Tenant's Pro Rata Share of the total Operating Expenses
for the previous calendar year shall be used as an estimate for the current year
and paid to Landlord pursuant to the provisions of this Article.
12.2.3. Landlord may, at its option, by service of written notice on Tenant,
choose to alter any payment periods provided for by this Lease under the
Articles titled "Rent," "Operating Expenses," "Taxes; Assessments,"
"Maintenance," "Indemnity and Exculpation" and "Insurance."
12.3. If at any time during the term of this Lease, it shall be determined
by rule, regulation or competent authority of any governmental or
quasi-governmental entity having jurisdiction over the Premises or the Project,
that any material, substance, service equipment, or system must be installed in
or removed from the Premises or the Building in order to protect or maintain the
health or safety of Tenant or those entering upon or working within the
Premises, Landlord shall make such installation or removal and the cost of such
installation or removal shall be included in Operating Expenses, provided that
the requirement of the installation or removal of any such material, substance,
service or equipment is not occasioned by the fault of Tenant in which event
such cost shall be borne by Tenant.
13. TAXES; ASSESSMENTS.
13.1. Tenant shall pay, before delinquency, all taxes that are levied and
assessed against Tenant's personal property installed or located in or on the
Premises, and that become payable during the term. On demand by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of these payments.
"Taxes" shall include assessments, license fees, license taxes, business license
fees, commercial rental taxes, levies, charges, penalties, taxes or similar
impositions, imposed by any authority having the direct power to tax, including
any city, county, state, or federal government, or any school, agricultural,
lighting, drainage, or other improvement or special assessment district thereof,
as against any legal or equitable interest of Landlord in the Project, including
but not limited to, the following:
13.1.1. any tax on Landlord's right to other income from the Premises or as
against Landlord's business of leasing the Premises;
13.1.2. any assessment, tax, fee, levy, or charge in substitution, partially
or totally, of any assessment, tax, fee, levy, or charge previously included
within the definition of real estate tax, including but not limited to, any
assessments, taxes, fees, levies, and charges that may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants. It is the intention of
Tenant and Landlord that all such new and increased assessments, taxes, fees,
levies, and charges be included in Real Property Taxes for the purposes of this
Lease;
13.1.3. any assessment, tax, fee, levy, or charge allocable to or measured
by the area of the Premises or the rent payable hereunder, including, without
limitation, any gross income tax or excise tax levied by the State, city, or
federal government, or any political subdivision thereof, with respect to the
receipt of such rent, or upon or with respect to the possession, leasing,
operating, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises, or any portion thereof, and
13.1.4. any assessment, tax, fee, levy, or charge upon this transaction or
any document to which Tenant is a party creating or transferring an interest or
an estate in the Premises.
13.2. Whenever possible, Tenant shall cause said trade fixtures,
furnishings, equipment and personal property to be separately assessed. If,
however, any taxes on Tenant's personal property are levied against Landlord or
Landlord's property, or if the assessed value of the Premises is increased by
the inclusion of a value placed on Tenant's personal property, and if Landlord
pays the taxes on any of these items or the taxes based on the increased
assessment of these items, Tenant, on demand, shall immediately reimburse
Landlord for the sum of the taxes levied against Landlord, or the proportion of
the taxes resulting from the increase in Landlord's assessment. Landlord shall
have the right to pay these taxes regardless of the validity of the levy.
13.3. Tenant shall pay to Landlord, in the manner provided in the Article
titled "Operating Expenses," Tenant's Pro Rata Share, of all real property taxes
and general and special assessments ("real property taxes") levied and assessed
against the land, building, and other improvements of which the Premises are a
part.
13.4. If any general or special assessment is levied and assessed against
the Premises which under the Laws then in force may be evidenced by improvement
or other bonds and may be paid in annual installments, only the amount of such
annual installment, with appropriate proration for any partial year, and
interest thereon, shall be included within a computation of taxes and
assessments levied against the Premises.
13.5. Tenant shall pay to Landlord any and all excise, privileges and other
taxes (other than net income and estate taxes) levied or assessed by any
federal, state or local authority ("taxing authority") upon the rent received by
Landlord hereunder. Tenant shall also pay to Landlord any business tax imposed
upon Landlord by any taxing authority whether or not such tax is based or
measured, in whole or in part, by amounts charged to Tenant or received by
Landlord from Tenant under this Lease.
13.6. If at any time during the term of this Lease, any taxing authority
shall alter the methods and/or standards of taxation and/or assessment ("tax
plan"), in whole or in part, so as to impose a tax plan in lieu of or in
addition to the tax plan in existence as of the date of this Lease, such taxes
or assessments based upon such altered tax plan including: (i) any tax,
assessment, excise, surcharge, fee, penalty, bond or similar imposition
("impositions") whether or not in lieu, partially or totally, of any impositions
assessed against the land, building, and other improvements of which the
Premises are a part prior to any alterations in the tax plan; (ii) any
impositions on Landlord's right to rent or other income from the Premises or
against Landlord's business of leasing the Premises; (iii) any impositions
allocable to or measured by the area of the Premises or the rent payable
hereunder, including without limitation any impositions levied by any taxing
authority with respect to such rental or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises or any portion thereof; (iv) any impositions
upon this Lease transaction or any document to which Tenant is a party which
creates or transfers any interest or estate in or to the Premises; and (v) any
special, unforeseen or extraordinary impositions however described, shall also
be considered taxes for the purposes of this Lease.
13.7. Tenant's liability to pay real property taxes shall be prorated on the
basis of a 365-day year to account for any fractional portion of a fiscal year
included in the term at its commencement and expiration.
13.8. If at any time during the term of this Lease any of Tenant's Taxes are
levied against Landlord or Landlord's property, or if the assessed value of the
Project is increased by the inclusion therein of a value placed upon such
personal property or fixtures of Tenant or upon such improvements made to the
Premises, Landlord shall not be obligated to pay such Tenant's Taxes. If
Landlord pays such Tenant's Taxes so levied or so based upon such increased
assessment, which Landlord shall have the right to do regardless of the validity
thereof, but only under protest if requested by Tenant in writing, then Tenant
shall, within ten (10) days after receipt of Landlord's written demand for
payment thereof, repay to Landlord such Tenant's Taxes so paid by Landlord, or
the portion of such Tenant's Taxes resulting from such increase in the
assessment. However, in any such event, Tenant shall have the right, in the name
of the Landlord and with Landlord's full cooperation, but without any cost to
Landlord, to bring suit in any court of competent jurisdiction to recover the
amount of any such Tenant's Taxes so paid, any amount so recovered to belong to
Tenant. The portion of any such Tenant's Taxes to be paid by Tenant pursuant to
this Section shall be determined by Landlord from the respective values assigned
in the assessor's worksheets or from such other best information as may be
reasonably available to Landlord.
14. MAINTENANCE.
14.1. Except as otherwise provided in this Article, and the Articles titled
"Destruction" and "Condemnation," Tenant shall, at its sole expense, maintain
the entire Premises (including, but not limited to, any and all appurtenances
thereto wherever located, including the interior surfaces of the exterior walls,
the exterior and interior portions of all doors, door frames, door checks, other
entrances, interior portions of windows, window frames, plate glass, suite
fronts, signs, all plumbing and sewage fixtures and equipment, within the
Premises, fixtures, walls, floors, ceiling, carpets, drapes, painted surfaces,
wall coverings, cabinets, shelves, whether any such work or repair, replacement,
renewal, or restoration is interior or exterior to the Premises, is foreseen or
unforeseen, or is ordinary or extraordinary) in good tenantable condition and
repair as reasonably determined by Landlord, including without limitation all
additions and improvements made by or for the Tenant as well as all items of
maintenance, alteration, or reconstruction that may be required by a
governmental agency having jurisdiction thereof.
14.2. If Tenant fails, refuses, or neglects to commence and complete repairs
promptly and adequately, to remove any liens, to pay any cost or expense, to
reimburse Landlord, or otherwise to perform any act or fulfill any obligation
required of Tenant, Landlord may make or complete any such repairs, remove such
lien, pay any such cost or expense, perform the same without prior notice to,
but at the sole expense of, Tenant. Tenant shall promptly reimburse Landlord for
all expenses of Landlord for all expenses of Landlord thereby incurred within
ten (10) days after receipt by Tenant from Landlord of a statement setting forth
the amount of such expenses. Landlord's rights and remedies pursuant to this
Section shall be in addition to any and all rights and remedies provided under
this Lease or at law and shall not affect a waiver of Tenant's obligations.
14.3. Landlord shall not have any responsibility to maintain the Premises.
Tenant, as a material part of the consideration rendered to Landlord, in
entering into this Lease, hereby waives the provisions of the California Civil
Code with respect to Landlord's obligation for tenantability of the Premises and
Tenant's right to make repairs and deduct the expenses of such repairs from
rent.
14.4. Tenant shall, at its sole cost, keep and maintain all window and door
glass, utilities, fixtures and mechanical equipment used by Tenant in good
order, condition and repair.
14.5. Landlord shall, at Tenant's sole expense, arrange for the maintenance
of any heating and/or air conditioning units servicing the Premises with a
reputable maintenance service person or entity. Tenant shall pay the costs of
said maintenance as additional Rent. In the event that any heating and/or air
conditioning unit services more than one Tenant, Tenant shall pay a reasonable
proportion of the cost of the maintenance (including labor and parts), which
proportion shall be determined by Landlord based upon Tenant's proportionate
share of the square footage of the area serviced by any such unit.
14.6. Landlord shall keep in good condition and repair the roof and
structural components of the Premises except when such maintenance and repair is
necessitated by reason of Tenant's negligence, alteration of or addition to the
Premises, or breach of any term or condition of this Lease. All costs of
Landlord's maintenance and repairs shall be borne by Tenant and prorated in the
manner set forth in the Article titled "Operating Expenses." Landlord shall
have no obligation to make any such repairs until Landlord has received written
notice from Tenant with respect to the need for such repairs, and Landlord shall
not be deemed to be in default with respect to its obligation to repair unless
and until Landlord has (i) received said written notice and (ii) failed to make
such repairs within a reasonable period following the receipt of said notice.
Landlord shall, after receiving written notice, exercise due diligence in making
such repairs. Tenant hereby waives any provisions of any and all Laws
permitting Tenant to make repairs at Landlord's expense. Landlord shall enforce
any express construction warranties for the benefit of Tenant to the extent that
they are available. There shall be no abatement of rent and no liability of
Landlord under any circumstances by reason of any loss of or any injury to
property, lost profits, or for injury to or interference with Tenant's business
arising from the making of or Landlord's failure to make any repairs,
alterations, or improvements.
14.7. Landlord shall, at Tenant's cost, repair and maintain the Project
Enhancement Areas And Unit Shared Use Areas in a neat, clean and orderly
condition and repair, properly lighted and landscaped, and shall operate the
Project, in Landlord's sole discretion, as a first class
industrial/office/commercial real property development. All expenses in
connection with the Project Enhancement Areas And Unit Shared Use Areas shall be
charged and prorated in the manner set forth in the Article titled "Operating
Expenses." It is understood and agreed that the phrase "expenses in connection
with said Project Enhancement Areas And Unit Shared Use Areas" shall include,
but shall not be limited to, all sums expended in connection with said Project
Enhancement Areas And Unit Shared Use Areas for all general maintenance and
repairs, resurfacing, painting, restriping, cleaning, sweeping and janitorial
services; maintenance and repair of sidewalks, curbs, and Building signs (other
than Tenant's sign), sprinkler systems, planting and landscaping; lighting and
other utilities; painting of all exterior surfaces of the Building or buildings
in the Project; directional signs and other markers and bumpers; maintenance and
repair of any fire protection systems, automatic sprinkler systems, lighting
systems, storm drainage systems and any other utility systems; personnel to
implement such service, including, if Landlord deems necessary, the cost of
security guards and/or all costs and expenses pertaining to a security alarm
system for the tenants; police and fire protection services; personal property
taxes levied on or attributable to personal property owned by Landlord which is
consumed in the operation or maintenance of the Project Enhancement Areas And
Unit Shared Use Areas; depreciation and maintenance on operating machinery and
equipment (if owned) and rental paid for such machinery and equipment (if
rented); any parking charges, surcharges or any other costs levied or assessed
by local, state or federal governmental agencies in connection with the use of
parking facilities; fees for required licenses and permits; adequate public
liability and property damage insurance on the Project Enhancement Areas And
Unit Shared Use Areas; reserves for exterior painting and other appropriate
reserves; and a reasonable allowance to Landlord for Landlord's supervision of
the said Project Enhancement Areas And Unit Shared Use Areas, which cost shall
not exceed three percent (3%) of the total of the aforementioned expenses for
said calendar year. Landlord may, however, cause any or all of said services to
be provided by an independent contractor or contractors.
14.8. Landlord's exercise of any right or obligation to maintain or repair
the Premises, Project Enhancement Areas And Unit Shared Use Areas and/or other
areas of the Project shall not entitle Tenant to any abatement of rent,
compensation or damages for injury, loss or inconvenience occasioned thereby.
14.9. Tenant waives the right to make repairs at Landlord's expense under
any Law, including, but not limited to, Sections 1932, 1933, 1941, and 1942 of
the California Civil Code.
14.10. Tenant, at its own expense, shall make all repairs to the Project
that are made necessary by any breach of this Lease or any misuse or neglect by:
14.10.1. Tenant or any of its officers, agents, employees, contractors,
licensees, or subtenants; or
14.10.2. Any visitors, patrons, guests, or invitees of Tenant or its
subtenant.
14.11. All such repairs shall be at lest equal in quality to the original
work, shall be made only by a licensed, bonded contractor approved in advance by
Landlord, and shall be made only at such time or times as shall be approved by
Landlord. Landlord may impose reasonable restrictions and requirements with
respect to such repairs. At the time of the expiration of the tenancy created
herein, Tenant shall surrender the Premises in good order, condition, and
repair, ordinary wear and tear excepted. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises.
14.12. Tenant shall, at its own expense, keep and maintain the Premises in a
clean, sanitary, and safe condition in accordance with all Laws.
14.13. Tenant shall, at its own expense, install and maintain such fire
extinguishers and other fire protection devices (other than sprinkler systems)
as may be required in the Premises from time to time by any agency having
jurisdiction and/or by the insurance underwriters insuring the Building
15. UTILITIES AND SERVICES.
15.1. Except as otherwise provided in this Article, Tenant shall make all
arrangements for and pay for all utilities and services furnished to or used by
it, including, without limitation, gas, electricity, water, telephone service,
and trash collection, and for all connection charges. If Tenant requires or
utilizes more water or electrical power than Landlord considers reasonable or
normal for general office use, light manufacturing, or warehousing, Landlord may
at its option (a) require Tenant to pay, as additional rent, the cost, as fairly
determined by Landlord, incurred by such extraordinary usage and (b) install
separate meter(s) or monitors for the Premises, at Tenant's sole expense.
15.2. In the event that Landlord furnishes any utilities (referred to herein
as the "Jointly Metered Utilities"), Landlord shall only be required to provide
heating, air conditioning, and ventilation during normal business hours. Normal
business hours shall be defined from time to time by Landlord in the rules and
regulations.
15.3. Tenant shall pay to Landlord, as additional rent, the cost of all
Jointly Metered Utilities in the following manner:
15.3.1. Tenant shall pay to Landlord, as additional rent, on the first day
of each calendar month of the term of this Lease, an amount equal to Landlord's
best estimate (based on Landlord's budgeted figures) of all Jointly Metered
Utilities based upon Tenant's proportionate share of the occupied square footage
of the building or buildings serviced by such meter and any extraordinary uses
which may be made by Tenant;
15.3.2. Within sixty (60) days following the end of each calendar year,
Landlord shall furnish Tenant with a statement covering the calendar year just
expired (certified as correct by an authorized representative of Landlord, or if
requested by a majority of the tenants in the Building by a certified public
accountant) showing (i) the total cost of Jointly Metered Utilities; (ii) the
amount of Tenant's proportionate share of the Jointly Metered Utilities for the
calendar year; and (iii) the payments made by Tenant with respect to such period
as set forth in this Article. If Tenant's payments exceed Tenant's
proportionate share of such costs, Tenant shall be entitled to offset the excess
against the next payments due Landlord as set forth in this Article. However,
if Tenant's proportionate share of the Jointly Metered Utilities exceeds
Tenant's payments, Tenant shall pay Landlord the deficiency within ten (10) days
after receipt of such statement. In addition, Tenant's proportionate share of
the total Jointly Metered Utilities for the previous calendar year shall be used
as an estimate for the current year and paid to Landlord pursuant to the
provisions of this Article.
15.4. Tenant shall pay to Landlord, as additional rent, the Domestic Water
Fee in the following manner:
15.4.1. Tenant shall pay to Landlord, as additional rent, on the first day
of each calendar month of the term of this Lease, the Domestic Water Fee. The
Domestic Water Fee is an amount equal to Landlord's best estimate (based on
Landlord's budgeted figures) of the cost of all domestic water furnished to the
Premises based upon Tenant's proportionate share of the occupied square footage
of the building or buildings serviced by such meter and any extraordinary uses
which may be made by Tenant. The Domestic Water Fee does not include the cost of
water used in any industrial cooling or washing processes. Such additional water
costs shall be borne by Tenant.
15.4.2. Ninety (90) days following the end of each calendar year, Landlord
shall furnish Tenant with a statement covering the calendar year just expired
(certified as correct by an authorized representative of Landlord) showing (i)
the total cost of domestic water charges (ii) the amount of Tenant's
proportionate share of the domestic water charges for the calendar year; and
(iii) the payments made by Tenant with respect to such period as set forth in
this Article. If Tenant's payments exceed Tenant's proportionate share of such
costs, Tenant shall be entitled to offset the excess against the next payments
due Landlord as set forth in this Article. However, if Tenant's proportionate
share of the domestic water charges exceeds Tenant's payments, Tenant shall pay
Landlord the deficiency within ten (10) days after receipt of such statement. In
addition, Tenant's proportionate share of the total domestic water charges for
the previous calendar year shall be used as an estimate for the current year and
paid to Landlord pursuant to the provisions of this Article
15.5. Landlord shall not be liable for, and Tenant shall not be entitled to,
any reduction of rental by reason of Landlord's failure to furnish any utilities
when such failure is caused by accident, breakage, repairs, strikes, lockouts or
other labor disturbances or labor disputes of any character, or by any other
cause, similar or dissimilar, beyond the reasonable control of Landlord. No such
failure or interruption shall entitle Tenant to terminate this Lease. Landlord
shall not be liable, under any circumstances for a loss of or injury to
property, however occurring, through or in connection with or incidental to
failure to furnish any of the foregoing. Wherever heat generating machines or
equipment are used in the Premises which affect the temperature otherwise
maintained by the air conditioning system, Landlord reserves the right to
install supplementary air conditioning units in the Premises and the cost
thereof, including the cost of installation, and the cost of operation and
maintenance thereof shall be paid by Tenant to Landlord upon demand by Landlord.
15.6. Tenant may, at its sole expense, elect to install its own meter for
any utilities which are jointly metered by written notice delivered to Landlord
one (1) month prior to the initiation by Tenant of any work to effectuate such
change.
15.7. Landlord shall, during all normal business hours, maintain and keep
lighted the common stairs, common entries, and toilet rooms in the building of
which the Premises are a part.
15.8. Landlord shall not be liable for, and Tenant shall not be entitled to,
any abatement or reduction of rent by reason of Landlord's failure to furnish
any utilities when such failure is caused by accident; act of God; breakage:
repairs; strikes; lockouts or other labor disturbances or labor disputes of any
character; any Law, moratorium, or other action of any federal, state, county,
or municipal authority; inability despite the exercise of reasonable diligence
by Landlord to obtain electricity, water, or fuel; or by any other cause,
similar or dissimilar, beyond the reasonable control of Landlord. No such
failure or interruption shall entitle Tenant to terminate this Lease. Also, no
eviction of Tenant shall result from such failure and Tenant shall not be
relieved from the performance of any covenant or agreement in this Lease because
of such failure. Landlord shall not be liable, under any circumstances for a
loss of or injury to property, however occurring, through or in connection with
or incidental to failure to furnish any of the foregoing. Wherever heat
generating machines or equipment are used in the Premises which affect the
temperature otherwise maintained by the air conditioning system, Landlord
reserves the right to install supplementary air conditioning units in the
Premises and the cost thereof, including the cost of installation, and the cost
of operation and maintenance thereof shall be paid by Tenant to Landlord upon
demand by Landlord.
15.9. Landlord reserves the right to stop providing plumbing, ventilation,
air conditioning, electric, water, or any other service provided by Landlord
under this Lease, when necessary by reason of accident or emergency or for
repairs, alterations or improvements, which in the reasonable judgment of
Landlord are desirable or necessary to be made, until said repairs, alterations,
or improvements shall have been completed.
16. INDEMNITY AND EXCULPATION.
16.1. Tenant is liable for, and shall indemnify, protect, defend, and hold
Landlord harmless from and against, any and all loss, claims, actions, suits,
liabilities, judgments, costs, and expenses (including attorneys' fees) by
reason of the following:
16.1.1. injury to any person or property, from whatever cause, all or in
part connected with the condition or use of the Premises or the improvements or
personal property located therein, including, but not limited to, any liability
for injury to the person or property of Tenant, its agents, officers, employees,
invitees, or trespassers;
16.1.2. any activity, work or thing done, permitted or suffered by Tenant in
or about the Premises, the Project or the Common Area; and
16.1.3. any breach or default in the performance of any obligation to be
performed by Tenant under the terms of this Lease; and
16.1.4. any act, neglect, fault or omission of Tenant or of its agents or
employees, except to the extent caused by or resulting from the gross negligence
or willful misconduct of Landlord or its employees in the operation or
maintenance of the Premises, the Building, or the Project.
16.2. Tenant shall, at Tenant's expense, resist and defend any such action,
suit, or proceeding or cause the same to be resisted or defended by counsel
designated by Tenant and approved by Landlord in writing. Tenant's obligation
hereunder shall survive the termination of this Lease, if the incident requiring
such defense occurred during the Lease term.
16.3. Neither Landlord nor any manager, member, partner, director, officer,
agent or employee of Landlord shall be liable to Tenant or its partners,
directors, officers, contractors, agents, employees, invitees, sublessees,
licensees for any loss, injury or damage to or death of Tenant or to any other
person, or to its or their property, goods, wares, and merchandise in, upon, and
about the Premises irrespective of the cause of such injury, damage or loss,
except to the extent caused by or resulting from the gross negligence or willful
misconduct of Landlord or its employees in the operation or maintenance of the
Premises, the Building, or the Project. Further, neither Landlord nor any
manager, member, partner, director, officer, agent or employee of Landlord shall
be liable (i) for any such damage caused by other tenants or persons in or about
the Project, or caused by quasi-public work; or (ii) for consequential damages
arising out of any loss of the use of the Premises of any equipment or
facilities therein by Tenant or any person claiming through or under Tenant.
Tenant, as a material part of the consideration to Landlord, hereby assumes all
risk of all such damage to property or injury or death to person in, upon or
about the Premises from any cause whatsoever. Except as provided in this
Section, Tenant hereby waives all its claims in respect thereof against
Landlord.
16.4. All of Tenant's releases and indemnification, defense, and hold
harmless obligations under this Lease survive the expiration or other
termination of this Lease, without limitation.
16.5. Any diminution or shutting off of light, air or view by any structure
which may be erected on lands adjacent to the Project shall in no way affect
this Lease or impose any liability on Landlord.
17. INSURANCE.
17.1. Landlord shall maintain, at Tenant's expense, a policy or policies of
insurance, as Landlord reasonably deems necessary from time to time or is
required by Landlord's lenders, protecting against the following:
17.1.1. Fire and other perils normally included in the extended coverage
insurance with special form, to the extent of at least one hundred percent
(100%) of the insurable value of the Building and other improvements on the
Premises exclusive of trade fixtures, equipment, goods and materials belonging
to Tenant;
17.1.2. Rent loss insurance to the extent of at least one hundred percent
(100%) of the annual gross rentals from the Project of which the Premises
constitutes a part; and
17.1.3. Public liability and property damage insurance and products
liability insurance with respect to Project Enhancement Areas And Unit Shared
Use Areas for the joint benefit of Landlord and Tenant in amounts (i) not less
than $1,000,000 for injury or death to any one person, (ii) not less than
$1,000,000 per occurrence, and (iii) not less than $250,000 per occurrence for
damage to property. Said amount shall be subject to adjustment every Three (3)
years to the then prevailing limits normally required for operations of the type
conducted by Tenant on the Premises.
17.2. Tenant shall pay to Landlord, as additional rent, and in the manner
provided in the Article titled "Operating Expenses," Tenant's Pro Rata Share of
the cost of insurance required in Sections 1 and 6 of this Article.
17.3. Tenant shall maintain in force and effect at all times during the term
of this Lease, and at all times during any early entry whereby Tenant desires to
perform any work or store any property in the Premises, a policy or policies of
fire, extended coverage, and special extended coverage ("all risk") insurance
with respect to Tenant's fixtures, furniture, personal property, equipment,
goods and materials located in the Premises, sprinkler leakage, energy systems
coverage, coverage for water damage to contents, and earthquake sprinkler
leakage, with vandalism and malicious mischief endorsements to the extent of at
least one hundred percent (100%) of their insurable value, including all
leasehold improvements and betterments to the Premises installed by or paid for
by Tenant. Coverage shall also include all personal property of third parties
to the extent any such fixtures and personal property are used or located in the
Premises. During the term of this Lease, the proceeds of any such policy or
policies of fire insurance shall be used solely for the repair or replacement of
the fixtures or equipment so insured. Landlord shall have no claim or interest
in said insurance and shall sign all documents necessary to effectuate the
settlement of any claim or loss by Tenant.
17.4. Tenant shall maintain in force and effect at all times during the term
of this Lease, with an insurance company acceptable to Landlord, a comprehensive
general liability insurance policy with respect to the Premises, for the joint
benefit of Landlord and Tenant for personal injury in amounts of not less than
$1,000,000 for bodily injury or death to any one person, in an amount not less
than $3,000,000 per occurrence, for property damage in an amount of not less
than $1,000,000 per occurrence, and in an amount not less than $3,000,000
general aggregate on a per location basis. Such insurance shall also include
blanket contractual coverage covering Tenant's indemnity obligations hereunder,
public liability, broad form property damage, products liability, completed
operations, legal liability in excess of recovery obtained by Landlord under any
insurance maintained by Landlord, liquor liability or host liquor liability, if
Tenant serves liquor in the Premises, and owned and non-owned automobile
coverages. The amounts of such public liability insurance shall be increased
from time to time as Landlord may reasonably determine or as required by any
lender with an interest in the Project. Such insurance must include: (a)
specific coverage provisions or endorsements naming Landlord and Property
Manager as additional insureds by an "Additional Insured - Managers or Lessors
of Premises" endorsement (or equivalent coverage or endorsement); and (b)
provisions stating that the insurer has a duty to defend all insureds under the
policy (including additional insureds), and that defense costs are paid in
addition to, and do not deplete, the policy limits. Tenant shall furnish
Landlord with a certificate of insurance with respect to such policy or policies
prior to entry of the Premises.
17.5. Tenant shall maintain in force and effect at all times during the term
of this Lease with an insurance company acceptable to Landlord, workers'
compensation insurance, including employer's liability coverage, as required by
any and all Laws.
17.6. Tenant shall not keep, use, sell or offer for sale in or upon the
Premises any article which may be prohibited by any insurance policy
periodically in force covering the Project. If Tenant's occupancy or business
in, or on, the Premises, whether or not Landlord has consented to the same,
results in any increase in premiums for the insurance periodically carried by
Landlord with respect to the Project or any portion thereof, Tenant shall pay
any such increase in premiums as additional rent within ten (10) days after
being billed therefor by Landlord. In determining whether increased premiums
are a result of Tenant's use of the Premises, a schedule issued by the
organization computing the insurance rate on the Project or the Tenant
Improvements showing the various components of such rate, shall be conclusive
evidence of the several items and charges which make up such rate. Tenant shall
promptly comply with all reasonable requirements of the insurance authority or
any present or future insurer relating to the Premises.
17.7. Landlord and Tenant hereby mutually release each other from liability
and waive all right to recover against each other (and against the members,
officers, employees, and agents of the other party) from any loss or damage from
perils insured against under their respective fire insurance policies, including
any extended coverage and endorsements to said policies. However, this Section
shall be inapplicable if it would have the effect, but only to the extent that
it would have the effect, of invalidating any insurance coverage of Landlord or
Tenant. The Parties shall, in obtaining the policies of insurance that they are
required to maintain under this Lease, give notice to their respective insurance
carriers that the foregoing mutual waiver of subrogation is contained in this
Lease, and each shall obtain, if available, from their respective insurance
companies, a waiver of any right of subrogation which said insurance company may
have against the Landlord or the Tenant, as the case may be. In the event that
the insurance company of Tenant does not waive the right of subrogation against
Landlord and its insurance company, Tenant shall (i) maintain during the term of
this Lease fire legal liability coverage with respect to the Premises and (ii)
shall pay to Landlord upon demand, Landlord's cost incurred in securing fire
legal liability protecting Landlord in the event of the destruction of Tenant's
property.
17.8. Landlord may maintain, at the Tenant's expense (pro rated in the
manner described in the Article titled "Operating Expenses"), boiler and
machinery insurance on all boilers, heating equipment, air conditioning
equipment, and other pressure vessels and systems that may be located in, on, or
about the Premises. Tenant shall reimburse Landlord for the insurance provided
by Landlord under this Section in accordance with the terms set forth in Section
2 of this Article.
17.9. All the insurance required under this Lease shall:
17.9.1. Be issued by insurance companies authorized and licensed to do
business in the State of California, with a General Policyholders Rating of "A",
and a financial rating of at least superior status as rated in the most recent
edition of Best's Insurance Reports;
17.9.2. Be issued as a primary policy;
17.9.3. Contain an endorsement requiring one (1) month written notice from
the insurance company to both Landlord and Landlord's lender before cancellation
or change in the coverage, scope, or amount of any policy.
17.9.4. Be issued by a responsible carrier reasonably acceptable to
Landlord.
17.10. Tenant may elect to have (i) reasonable deductibles not to exceed
$2,500 in connection with the policies of insurance required to be maintained by
Tenant under this Section and (ii) the insurance coverage required to be
maintained under this Lease by Tenant provided under "umbrella" policies of
insurance provided that Tenant obtains a "per project, per location
endorsement".
17.11. Tenant shall deliver to Landlord at least ten (10) days prior to the
time such insurance is first required to be carried by Tenant, and thereafter at
least thirty (30) days prior to expiration of each such policy, certificates of
insurance evidencing the above coverages with limits not less than those
specified above and certified copies of all required endorsements. With the
exception of Workers Compensation, such certificates and the policies they refer
to, shall (i) be endorsed to name Landlord and each of its , affiliates, lenders
and agents so designated by Landlord from time-to-time as additional insureds,
(ii) expressly provide that the interests of such persons therein shall not be
affected by any breach by Tenant of any policy provision for which such
certificates or endorsements evidence coverage, (iii) be on an occurrence basis
and (iv) contain a cross-liability endorsement or severability of interest
clause acceptable to Landlord. A copy of the additional insured endorsement for
policies currently in effect shall be attached to the certificates as required
above. Further, each such certificate and endorsement shall expressly provide
that no less than thirty (30) days' prior written notice shall be given Landlord
in the event of material alteration or cancellation of the coverage evidenced by
such certificate or endorsement. The words "Carrier agrees to provide such
notice" shall be used on Certificates of Insurance provided to Landlord.
Certificates of insurance containing such phrases as "Carrier shall endeavor to
notify Certificate Holder" " shall not be considered acceptable for the purposes
of this provision. The insurance which Tenant is required to maintain in force
and effect under this Agreement shall be the primary insurance as respects
Landlord (and any other additional insureds designated by Landlord) and not
contributory with any other available insurance. The certificates of insurance
evidencing the liability insurance coverage shall contain an endorsement to such
effect.
17.12. If on account of a failure of Tenant to comply with the provisions of
the above Section, Landlord is adjudged a co-insurer by its insurance carrier,
then any loss or damage Landlord shall sustain by reason thereof shall be borne
by Tenant and shall be immediately paid by Tenant as additional rent upon
receipt of a ▇▇▇▇ therefor and evidence of such loss or damage.
17.13. In no event shall the limits of any coverage maintained by Tenant
pursuant to this Article be considered as limiting Tenant's liability under this
Lease.
17.14. If Tenant fails to maintain any insurance required hereunder,
Landlord may procure such policies for Tenant's account, and the cost thereof,
plus an administrative fee of fifteen percent (15%), shall be immediately due
and payable by Tenant as additional rent.
18. ALTERATIONS.
18.1. Tenant shall not make any alterations, additions or improvements
(collectively, "alterations") to the Premises except as provided herein. Any
alterations, additions or improvements desired by Tenant shall be made, at
Tenant's expense only after Tenant submits detailed final plans and drawings to
Landlord and obtains Landlord's consent to alterations and approval of such
plans Work shall be performed only by contractors or mechanics approved by
Landlord, which approval shall not be unreasonably withheld. Tenant shall
construct such Alterations in accordance with the plans and specifications
approved by Landlord, and shall not amend or modify such plans and
specifications without Landlord's prior written consent. If the proposed change
requires the consent or approval of the holder of a mortgage encumbering the
Project, such consent or approval must be secured prior to the construction of
such Alteration. Tenant agrees that there shall be no construction of partitions
or other obstructions which might interfere with Landlord's free access to
mechanical installations or service facilities of the Building or interfere with
the moving of Landlord's equipment to or from the enclosures containing said
installations or facilities. All such work shall be done at such times and in
such manner as Landlord may from time to time reasonably designate. Any such
alterations, additions or improvements shall be in conformity with all Laws and
in full compliance with the requirements of any mortgages encumbering the
Project and any insurance policies relating to the Project and excepting movable
furniture, trade fixtures, machinery and other trade equipment shall become part
of the realty and belong to Landlord. However, Landlord can elect, within one
(1) month before expiration of the term, or within one (1) month after
expiration or termination of the term, to require Tenant to remove any
alterations, additions or improvements Tenant has made to the Premises. If
Landlord so elects, Tenant at its sole cost shall restore the Premises to the
condition designated by Landlord in its election, before the last day of the
term, or within fifteen (15) days of Landlord's election, whichever is first.
18.2. Before commencing any work, whether or not Landlord's consent is
required, Tenant shall give Landlord at least ten (10) days' written notice of
the proposed commencement of such work to allow Landlord to post and record, at
Tenant's expense, notices of non-responsibility. Tenant shall, if required by
Landlord, secure at Tenant's own cost and expense, appropriate insurance and, if
the cost of the work exceeds $25,000, a completion and lien indemnity bond
satisfactory to Landlord for any said work. Tenant further covenants and agrees
that any mechanic's lien or other lien filed against the Premises or against the
Building for work claimed to have been done for, or materials claimed to have
been furnished to, Tenant will be discharged by Tenant as provided in the
Article titled "Mechanics Liens" below. Upon completion of any work, Tenant
shall record a notice of completion sufficient under applicable mechanic's' lien
Laws.
18.3. Tenant may install trade fixtures, machinery, or other trade equipment
in conformance with all Laws and in full compliance with the requirements of any
mortgages encumbering the Project and any insurance policies relating to the
Project. Tenant may remove any of such trade fixtures or machinery upon the
expiration or termination of this Lease if Tenant is not in default under the
terms and conditions of this Lease. If Tenant shall fail to remove all of its
effects from the Premises upon termination of this Lease for any cause
whatsoever, the provisions under the Article titled "Surrender of Premises" of
this Lease shall apply.
18.4. In the event that Tenant installs trade fixtures, machinery or other
trade equipment, Tenant shall return the Premises on expiration or termination
of this Lease to the same condition as existed at the date of entry, reasonable
wear and tear excepted. In any event, Tenant shall repair any damage resulting
from the removal of trade fixtures, machinery or other trade equipment of
Tenant.
18.5. Any electrical wiring, conduit, junction boxes and outlets installed
by Tenant shall comply with all building codes and shall become the property of
Landlord upon termination of this Lease.
18.6. If Tenant fails to promptly commence and diligently pursue completion
of removal and restoration of alterations, additions, or improvements, Tenant
shall pay to Landlord the cost thereof, including a reasonable charge for
Landlord's overhead, upon Landlord's demand. If Tenant has not removed such
items and completed restoration of the Premises upon the expiration or earlier
termination of this Lease, Tenant shall continue to pay rent for the portion of
the Premises not completely vacated.
19. MECHANICS' LIENS.
19.1. Tenant shall pay, when due, all costs for construction done by it or
caused to be done by it on the Premises as permitted by this Lease. Tenant
shall keep the building, other improvements, and land free and clear of all
mechanics' liens resulting from construction or other work done by or for
Tenant. Tenant hereby indemnifies and holds Landlord harmless against loss,
damage, attorney's fees and all other expenses on account of claims of lien of
laborers or materialmen or others for work performed or materials or supplies
furnished for Tenant or persons claiming under it. If Tenant shall not, within
ten (10) days following the imposition of any such liens, cause such lien to be
released of record by payment or posting of a proper bond satisfactory to
Landlord, then Landlord shall have, in addition to all other remedies provided
herein or by law, the right to cause such lien to be released by such reasonable
means as Landlord shall deem proper, including payment and/or defense against
the claim giving rise to such lien. All sums paid by Landlord and all expenses
incurred by it in connection therewith, together with an administrative fee of
fifteen percent (15%), shall create automatically an obligation of Tenant to pay
an equivalent amount to Landlord as Rent, which rent shall be so payable by
Tenant on Landlord's demand therefore with a late charge (as defined under the
article titled "Late Charges") and interest accruing from the date paid or
incurred by Landlord until reimbursed to Landlord by Tenant.
19.2. Tenant shall have the right to contest the correctness or the validity
of any such lien if, immediately on demand by Landlord, Tenant procures and
records a lien release bond issued by a corporation authorized to issue surety
bonds in California in an amount equal to one and one-half times the amount of
the claim of lien. The bond shall meet the requirements of the California Civil
Code and shall provide for the payment of any sum that the claimant may recover
on the claim (together with costs of suit, if it recovers in the action).
20. DESTRUCTION.
20.1. In the event of total or partial destruction of the Building and/or
the Premises, Landlord may elect, as soon as reasonably possible thereafter, to
commence repair, reconstruction and restoration of the Building and/or the
Premises. In that event, this Lease shall remain in full force and effect.
However, within ninety (90) days after the date of such damage or destruction,
Landlord, in Landlord's sole and absolute discretion, and regardless of the
availability of insurance proceeds, may elect not to so repair, reconstruct or
restore the Building and/or the Premises. In that event, this Lease shall
terminate as of the date of such damage or destruction.
20.2. In the event of a partial damage to or destruction of the Building
and/or the Premises, to an extent not exceeding twenty-five percent (25%) of the
full insurable value thereof, Landlord shall commence and proceed with
reasonable diligence with the work of repair, reconstruction and restoration if:
(i) the damage thereto is such that the Building and/or Premises may be
repaired, reconstructed or restored within a period of ninety (90) days from the
date of the happening of such casualty; and (ii) if Landlord receives insurance
proceeds sufficient to cover the cost of such repairs. In that event, this Lease
shall continue in full force and effect. Otherwise, Landlord, in Landlord's
sole and absolute discretion, may either: (i) elect to so repair, reconstruct or
restore, in which case the Lease shall continue in full force and effect; or
(ii) Landlord may elect not to repair, reconstruct or restore, in which case the
Lease shall terminate as of the date of such partial damage or destruction.
Under any of the conditions of this Section, Landlord shall give written notice
to Tenant of its intention within said sixty (60) day period.
20.3. If any partial damage or destruction is due to any cause other than
fire or other peril covered by extended coverage insurance, Landlord may, by
written notice to Tenant within ninety (90) days after the date of such damage
or destruction, elect to terminate this Lease as of the date of such damage or
destruction.
20.4. If Landlord determines in Landlord's reasonable opinion that Tenant
cannot be provided with reasonable use of and access to the repaired Premises or
the Building within six (6) months (or three (3) months during the last year of
the Lease term) after the date of any damage or destruction thereto, Tenant
shall have the right to terminate this Lease by written notice delivered to
Landlord within fifteen (15) days after the date of Landlord's determination,
provided that the damage or destruction was not due to the negligence or willful
misconduct of Tenant or its agents, employees or invitees.
20.5. Notwithstanding anything to the contrary contained in this Article,
Landlord shall not have any obligation whatsoever to repair, reconstruct or
restore the Premises when the damage or destruction resulting from any casualty
occurs during the last twelve (12) months of the term of this Lease. Landlord
may elect to terminate this Lease as of the date the damage occurred, regardless
of the sufficiency of any insurance proceeds. However, if Tenant has any
unexpired options to extend the term of this Lease, if Tenant delivers written
notice to Landlord exercising such option within five (5) days after such
termination by Landlord, this Lease shall remain in effect subject to the
remaining terms of this Article.
20.6. Tenant shall not be released from any of its obligations under this
Lease except to the extent and upon the conditions expressly stated in this
Article. Landlord shall not be liable for any failure to make any such repairs
if such failure is caused by any Unavoidable Delays (as defined below). However,
if such failure shall persist for more than one hundred eighty (180) days,
either party may, by written notice to the other, terminate this Lease as of the
date of the occurrence of such damage.
20.7. Upon any termination of this Lease under any of the provisions of this
Article, the parties shall be released without further obligation to the other
arising after the date possession of the Premises is surrendered to Landlord.
20.8. If Landlord is required or elects to restore the Premises as provided
in this Article, Landlord shall prosecute the same with reasonable diligence to
completion. However, Landlord shall not be required to restore alterations or
improvements made by Tenant, Tenant Improvements, Tenant's Trade Fixtures, or
Tenant's Personal Property. Such excluded items are the sole responsibility of
Tenant to restore. Without interfering with Landlord's repair and restoration
process, Tenant shall commence and diligently prosecute to completion the repair
and restoration of such alterations and improvements and shall replace all
Tenant Improvements, Tenant's Trade Fixtures, or Tenant's Personal Property
promptly upon delivery of the Premises to Tenant.
20.9. If Landlord elects to repair the damage, and, if the damage was due to
the negligence or willful misconduct of Tenant, Tenant shall pay Landlord an
amount equal to the difference between the actual cost of repair and any
insurance proceeds received by Landlord. If the Premises, the Building or the
Project is damaged, and such damage is of the type insured against under the
fire and special form property damage insurance maintained by Landlord
hereunder, the cost of repairing said damage, up to the amount of the deductible
under said insurance policy, shall be included as a part of Operating Expenses.
20.10. Landlord and Tenant hereby waive the provisions of any statutes or
court decisions that relate to the abatement of rent or termination of leases
when leased property is damaged or destroyed and agree that such event shall be
exclusively governed by the terms of this Lease.
20.11. If the existing laws do not permit the restoration as described in
this Article, either Party may terminate this Lease immediately by giving notice
to the other Party.
20.12. If Landlord is required or elects to restore the Premises as provided
in this Article, Tenant shall continue the operation of its business on the
Premises, during the restoration period, to the extent reasonably practicable
from the standpoint of prudent business management and to the extent that it
will not interfere with the repair and restoration process.
20.13. Except for abatement of rent as provided in this Article, Tenant
shall have no claim against Landlord for any damage suffered by reason of any
damage, destruction, repair or restoration of the Premises. Tenant shall not be
entitled to any compensation or damages from Landlord as a result of any partial
or total destruction of the Premises or for any inconvenience, loss, or damage
that Tenant may incur as a result of the restoration process.
20.14. In the event that either Party elects to terminate this Lease under
the enabling provisions of this Article, Tenant shall surrender to the Landlord
all proceeds from the insurance policies described in the Article titled
"Insurance," excluding proceeds for the Tenant's trade fixtures and equipment.
20.15. In the case of damage or destruction caused from a risk covered by
insurance provided in the Article titled "Insurance," there shall be no
abatement or reduction of rent. In the case of damage or destruction caused
from a risk not covered by the insurance provided in the Article titled
"Insurance," there shall be an abatement or reduction of rent between the date
of destruction and the date of completion of restoration, based on the extent to
which the destruction interferes with Tenant's use of the Premises.
20.16. In the case of damage or destruction caused from a risk not covered
by the insurance provided in the Article titled "Insurance," if such damage or
destruction is caused by or arises out of Tenant's acts or omissions, or the
acts or omissions of Tenant's agents, employees, contractors, and/or invitees,
Landlord shall not have any obligation to repair or restore under this Article,
and there shall be no abatement of rent under this Lease. Nothing in this
Article shall relieve or limit any liability of Tenant on account of such acts
or omissions.
21. CONDEMNATION.
21.1. "Condemnation" means (i) the exercise of any governmental power,
whether by legal proceedings or otherwise, by a condemnor and (ii) a voluntary
sale or transfer by Landlord to any condemnor, either under threat of
condemnation or while legal proceedings for condemnation are pending.
21.2. "Date of taking" means the date the condemnor has the right to
possession of the property being condemned.
21.3. "Award" means all compensation, sums, or anything of value awarded,
paid, or received on a total or partial condemnation.
21.4. "Condemnor" means any public or quasi-public authority, or private
corporation or individual, having the power of condemnation.
21.5. If, during the term or during the period of time between the execution
of this Lease and the date the term commences, there is any taking by
condemnation of all or any part of the land, building, or other improvements, of
which are a part of the Premises, or any interest in this Lease, the rights and
obligations of the Parties shall be determined pursuant to this Article.
21.6. If the Premises are totally taken by condemnation, this Lease shall
terminate on the date of taking.
21.7. If any portion of the Premises is taken by condemnation, this Lease
shall remain in effect, except that Tenant can elect to terminate this Lease if
the remaining portion of the Premises is rendered unsuitable for Tenant's
continued use of the Premises. If Tenant elects to terminate this Lease, Tenant
must exercise its right to terminate pursuant to this Section by giving notice
to Landlord within one (1) month after the nature and the extent of the taking
have been finally determined. If Tenant elects to terminate this Lease as
provided in this Section, Tenant also shall notify Landlord of the date of
termination, which date shall not be earlier than one (1) month nor later than
three (3) months after Tenant has notified Landlord of its election to
terminate. However, this Lease shall terminate on the date of taking if the
date of taking falls on a date before the date of termination as designated by
Tenant. If Tenant does not terminate this Lease within the one (1) month
period, this Lease shall continue in full force and effect.
21.8. If any portion of the Premises is taken by condemnation and this Lease
remains in full force and effect, on the date of taking the Base Rent shall be
reduced by an amount that is in the same ratio to Base Rent as the value of the
area of the portion of the Premises taken bears to the total value of the
Premises immediately before the date of taking.
21.9. If the parking area of the Premises is taken by condemnation, this
Lease shall remain in full force and effect. However, if fifty percent (50%)
or more of the parking area is taken by condemnation, either Party shall have
the election to terminate this Lease pursuant to this Section.
21.10. If, within one (1) month after the date that the nature and extent of
the taking are finally determined, Landlord notifies Tenant that Landlord at its
cost shall add on to the remaining Premises' parking area so that the area and
the approximate layout of the Premises and parking area will be substantially
the same after the date of taking as they were before the date of taking, and
Landlord commences the restoration immediately and completes the restoration
within three (3) months after Landlord notifies Tenant, this Lease shall
continue in full force and effect without any reduction in Base Rent, except the
abatement or reduction made pursuant to Section 12 of this Article.
21.11. Each Party waives the provisions of the California Code of Civil
Procedure allowing either Party to petition the superior court to terminate this
Lease in the event of a partial taking of the Premises.
21.12. If there is a partial taking of the Premises and this Lease remains
in full force and effect pursuant to Section 7 of this Article, Landlord at its
cost shall accomplish all necessary restoration.
21.13. Rent shall be abated or reduced during the period from the date of
taking until the completion of restoration, but all other obligations of Tenant
under this Lease shall remain in full force and effect. The abatement or
reduction of rent shall be based on the extent to which the restoration
interferes with Tenant's use of the Premises.
21.14. The award shall belong to and be paid to Landlord, except that Tenant
shall receive from the award the following:
21.14.1. A sum attributable to Tenant's improvements or alterations made to
the Premises by Tenant in accordance with this Lease, which Tenant's
improvements or alterations Tenant has the right to remove from the Premises
pursuant to the provisions of this Lease but elects not to remove; or, if Tenant
elects to remove any such Tenant's improvements or alterations, a sum for
reasonable removal and relocation costs not to exceed the market value of such
improvements or alterations.
21.14.2. A sum attributable to any excess of the market value of the
Premises (exclusive of Tenant's improvements or alterations for which Tenant is
compensated under this Section) for the remainder of the term, over the present
value at the date of taking of the Base Rent payable for the remainder of the
term.
21.14.3. A sum attributable to that portion of the award constituting
severance damages for the restoration of the Premises.
21.15. The taking of the Premises or any part of the Premises by military or
other public authority shall constitute a taking of the Premises by condemnation
only when the use and occupancy by the taking authority has continued for longer
than six (6) consecutive months. During the six (6) month period, all the
provisions of this Lease shall remain in full force and effect. However, rent
shall be abated or reduced during such period of taking based on the extent to
which the taking interferes with Tenant's use of the Premises. Landlord shall
be entitled to whatever award may be paid for the use and occupation of the
Premises for the period involved.
22. ASSIGNMENT.
22.1. Tenant shall not voluntarily assign or encumber its rights or interest
in this Lease or in the Premises, or sublease all or any part of the Premises,
or allow any other person or entity (except Tenant's authorized representatives)
to occupy or use all or any part of the Premises, without first obtaining
Landlord's written consent through strict accordance with the following
procedure:
22.1.1. Tenant must first give to Landlord a written notice of intent to
sublease or assign (referred to herein as "Tenant's Notice") at least one (1)
month prior to the effective date of any proposed subletting or assignment.
Tenant's Notice must contain the following: (i) whether Tenant proposes to
assign or sublet; (ii) the identity and trade of the proposed assignee or
sublessee (each of which is referred to herein as the "Transferee") with
accompanying financial statements and background information for both the
individual Transferee and its business entities; (iii) the nature of the
proposed subtenant's or assignee's business to be carried on in the Premises;
(iv) a signed statement from both the Tenant and the proposed Transferee stating
all the terms and conditions of all their transactions concerning the Premises;
and (v) in the case of a subletting, a copy of the proposed sublease.
22.1.2. Tenant must at all times promptly notify Landlord of any change
and/or alteration of the items required to be in Tenant's Notice. Tenant's
failure to do so, or any misrepresentation or untruth contained in Tenant's
Notice, by either the Tenant or the proposed Transferee, shall constitute a
default by Tenant, and Landlord shall have the right to elect to terminate this
Lease Agreement.
22.1.3. After receipt of Tenant's Notice, Landlord may, at any time within
one (1) month of said receipt, elect to recapture the Premises, or any part
thereof, and cancel this Lease as to the amount of the Premises recaptured, by
mailing a written cancellation notice to Tenant. Such cancellation shall become
effective one (1) month after receipt of said notice by Tenant. If only a
portion of the Premises is recaptured, this Lease shall terminate only as to
such portion and rent payable under this Lease shall be proportionately reduced.
Notwithstanding the foregoing, Tenant may avoid such termination by withdrawing
its proposed assignment or sublease by written notice delivered to Landlord
within five (5) days after Landlord's termination notice, and, in such event,
this Lease shall continue in full force and effect.
22.1.4. If Landlord fails to exercise its right to cancel this Lease within
the before-mentioned one (1) month period, said cancellation right on the part
of the Landlord shall be deemed waived, but only with respect to the assignment
or sub-letting specified in Tenant's Notice. Tenant may thereafter assign this
Lease or sublet the Premises in accordance with the terms of Tenant's Notice and
the restrictions of this Article. Tenant understands and acknowledges that
Landlord's right, as provided in this Article, to terminate this Lease rather
than approve the assignment thereof or the subletting of all or any portion of
the Premises is a material inducement for Landlord's agreeing to lease the
Premises to Tenant upon the terms and conditions herein set forth.
Sections 22.1.3 and 22.5 shall not apply to an assignment by Tenant of its
interest in this Lease to an affiliate if: (i) Tenant remains obligated to
perform all covenants according to the terms and conditions of the Lease; and
(ii) NATIONAL MANUFACTURING TECHNOLOGIES, INC. reaffirms its Guaranty of this
Lease concurrently with the assignment. For purposes of this Article,
"affiliate" shall mean a wholly owned subsidiary of Tenant or NATIONAL
MANUFACTURING TECHNOLOGIES, INC.
22.2. Tenant agrees to pay Landlord's reasonable costs and expenses
(including attorneys' fees) incurred in connection with the processing and
documentation of any requested assignment, subletting, transfer, change of
ownership, or hypothecation of this Lease or Tenant's interest in and to the
Premises, which is submitted to Landlord for Landlord's consent.
22.3. Any mortgage, pledge or assignment of this Lease, or if Tenant is a
corporation, any transfer of this Lease from Tenant by merger, consolidation,
reorganization or liquidation shall constitute an assignment for the purposes of
this Article. If Tenant is a corporation (other than a corporation publicly
traded stock on a nationally recognized stock exchange), an unincorporated
association, a limited liability company or a partnership, then the transfer
(including a transfer by means of a merger), assignment or hypothecation of any
stock or interest in such corporation, association, a limited liability company
or partnership in the aggregate in excess of fifty percent (50%) during any
consecutive twelve (12) month period shall be deemed an assignment within the
meaning and provisions of this Article. However, a transfer or assignment of any
such stock or interest by a shareholder or member to his spouse, children or
grandchildren is excepted from the foregoing provision. Tenant further
acknowledges and understands that Landlord's consent is required to any change
in entity form by Tenant, including, but not limited to, Tenant's change from a
general partnership to a limited liability partnership or a limited liability
company and that a condition to Landlord's consent to any such change shall be
Tenant's acknowledgment in writing that Tenant and its constituent partners or
owners remain fully liable and responsible under the Lease subsequent to the
date of the change in entity form.
22.4. Should any transfer, assignment (whether voluntary or involuntary, by
operation of law, under legal process or proceedings, by mortgage, by security
assignment, by receivership, in bankruptcy, or otherwise), encumbrance, or
sublease be made, or any of Tenant's right under this Lease be sold or otherwise
transferred by or under court order or legal process or otherwise, without
obtaining Landlord's written consent, according to the procedure described
above, such transfer, assignment, encumbrance, or sublease shall be voidable and
ineffective and, at Landlord's election, shall constitute a default. Landlord's
consent to any assignment, encumbrance, or sublease shall not constitute a
further waiver of the provisions of this Section, including without limitation,
Landlord's recapture right. The same shall apply to each successive transfer,
assignment, or subletting, if any. Landlord shall not unreasonably withhold
consent. It shall not be unreasonable for Landlord to withhold such consent
because it wishes to exercise its right to recapture all or part of the Premises
or because the proposed transferee is any governmental agency, federal, state,
local or foreign government, inconsistent with other tenants in the Project, or
for Landlord to condition such consent upon Landlord's determination that (i)
Tenant is not in default in the performance of any of its obligations (monetary
or non-monetary) under this Lease; (ii) the proposed assignee or subtenant is as
financially stable as Tenant and meets reasonable standards of credit-worthiness
then used by Landlord to assess a prospective tenant's ability to fulfill the
obligations of the Lease; and (iii) the proposed assignee or subtenant is likely
to conduct on the Premises a business of a character and quality substantially
equal to that conducted by Tenant and the entire Project in general. Tenant
agrees to pay Landlord's reasonable costs and expenses (including attorneys'
fees) incurred in connection with the processing and documentation of any
requested assignment, subletting, transfer, change of ownership, or
hypothecation of this Lease or Tenant's interest in and to the Premises, which
is submitted to Landlord for Landlord's consent. Consent by Landlord to an
assignment or a subletting shall neither release Tenant from its primary
liability under this Lease nor from its obligations as stated in this Article.
22.5. Without in any way limiting any other rights available to Landlord at
the time of any proposed assignment, Landlord expressly reserves the right to
adjust the Base Rent according to any change in the Consumer Price Index as
specified in the Article titled "Rent," whether or not such an adjustment would
otherwise be due at that time.
22.6. One half (1/2) of any consideration received by Tenant for either
assigning this Lease or from entering into a sublease contract, as well as one
half (1/2) of any continuing rent paid to Tenant from a Transferee in excess of
the rent Tenant was obligated to pay to Landlord at the time of the assignment
or sublease, shall be paid to the Landlord, within ten (10) days of receipt, in
consideration for Landlord's consent to any assignment or subletting. Tenant's
failure to pay to Landlord said required consideration shall constitute a
default by Tenant and Landlord shall have the right to immediately terminate
this Lease Agreement in addition to all other remedies.
22.7. Tenant immediately and irrevocably assigns to Landlord, as security
for Tenant's obligations under this Lease, all rent from any subletting of all
or a part of the Premises as permitted by this Lease, and Landlord, as assignee
and as attorney-in-fact for Tenant, or a receiver for Tenant appointed on
Landlord's application, may collect such rent and apply it toward Tenant's
obligations under this Lease. However, until the occurrence of default by
Tenant, Tenant shall have the right to collect such rent. Notwithstanding any
assignment, sublease, or other transfer, Tenant shall remain fully and primarily
liable under this Lease and shall not be released from performing any of the
terms, covenants and conditions of this Lease. In the event of a default
hereunder, Landlord may proceed directly against Tenant without pursuing any
assignee or subtenant. Landlord may modify this Lease without releasing Tenant
from its obligations under this Lease, provided that Tenant shall not be
responsible for any new obligations created by any such modification.
22.8. No interest of Tenant in this Lease shall be assignable by operation
of law (including, without limitation, the transfer of this Lease by testacy or
intestacy). Each of the following acts shall be considered an involuntary
assignment:
22.8.1. If Tenant is or becomes bankrupt or insolvent, makes an assignment
for the benefit of creditors, or institutes a proceeding under the Bankruptcy
Act in which Tenant is the bankrupt; or, if Tenant is a partnership or consists
of more than one person or entity, if any partner of the partnership or other
person or entity is or becomes bankrupt or insolvent, or makes an assignment for
the benefit of creditors;
22.8.2. If a writ of attachment or execution is levied on this Lease;
22.8.3. If, in any proceeding or action to which Tenant is a Party, a
receiver is appointed with authority to take possession of the Premises.
22.9. An involuntary assignment shall constitute a default by Tenant and
Landlord shall have the right to elect to terminate this Lease; in which case,
this Lease shall not be treated as an asset of Tenant.
22.10. If a writ of attachment or execution is levied on this Lease, Tenant
shall have 10 days in which to initiate removal of the attachment or execution
and six (6) months to remove the same. If any involuntary proceeding in
bankruptcy is brought against Tenant, or if a receiver is appointed, Tenant
shall have two (2) months in which to have the involuntary proceeding dismissed
or the receiver removed. Landlord shall have the option to extend said time
limitations.
22.11. Regardless of Landlord's consent, no subletting, assignment,
hypothecation, license or concession shall release Tenant of Tenant's
obligations or alter the primary liability of Tenant to pay the rent and perform
all other obligations to be performed by Tenant hereunder. The acceptance of
rent by Landlord from any other person shall not be deemed to be a waiver by
Landlord of any provision hereof. Consent to one assignment, subletting,
hypothecation, license or concession agreement shall not be deemed consent to
any subsequent assignment, subletting, hypothecation, license or concession
agreement. In the event of default by any assignee of Tenant or any successor
of Tenant in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
such assignee or successor. Landlord may consent to subsequent assignments,
subletting, hypothecations, licenses or concession agreements and to amendments
or modifications to this lease, with assignees or other successors of Tenant
without notifying Tenant or any successor of Tenant, and without obtaining its
or their consent thereto and such action shall not relieve Tenant of liability
under this Lease.
22.12. If Landlord does not elect to recapture pursuant to this Article,
Tenant may enter into a valid assignment or sublease provided that Landlord
consents thereto pursuant to this Article, and provided that (i) such assignment
or sublease is executed within ninety (90) days after Landlord has given its
consent to same, (ii) Tenant pays (or causes to be paid) Landlord's reasonable
costs and expenses (including attorneys' fees) incurred in connection with the
processing and documentation of any requested assignment, subletting, transfer,
change of ownership, or hypothecation of this Lease or Tenant's interest in and
to the Premises, (iii) Tenant is not in default under this Lease as of the
effective date of the assignment or sublease, (iv) there have been no material
changes (since the date on which Landlord's consent was given) with respect to
the financial condition or background of the proposed subtenant or assignee or
the business which said party plans to conduct on the Premises, and (v) a fully
executed original of such assignment or sublease (either of which shall state
that the assignee or subtenant agrees, for the express benefit of Landlord, to
be bound by all of the terms, covenants, and conditions of this Lease) is
delivered to Landlord prior to the date the assignee or subtenant takes
possession of any portion of the Premises.
22.13. Indemnity For Commissions. Tenant agrees to protect, defend and
indemnify and hold Landlord harmless with respect to any and all costs and
expenses (including attorneys' fees) and liability for compensation claimed by
any broker or agent in connection with any assignment, subletting or other
transfer of Tenant's interest under this Lease.
22.14. Notwithstanding any other provision of this Lease, Tenant shall not,
without Landlord's prior written consent, assign this Lease or sublet all or any
part of the Premises for any purpose which would violate any negative covenant
as to use contained in any then outstanding lease affecting the Building, in any
declaration of restrictions affecting the Building, or in any mortgage or deed
of trust affecting the Building. Landlord shall from time to time advise Tenant
of any such negative covenants, upon Tenant's making written request to Landlord
for such information. Moreover, Tenant shall not assign or sublet to any party
for a use which is not in compliance with the permitted uses as specified in the
Article titled "Use, Limitations" above.
22.15. If Tenant is a partnership, any new general partner added to the
partnership after the execution of this Lease shall be liable for the
obligations of Tenant. Any general partner who ceases to be a general partner
in Tenant after the execution of this Lease shall not be relieved of his
liability for the obligations of Tenant.
22.16. In addition, Tenant expressly warrants that the rental rate for such
sublet Premises shall not be included in any printed advertising or mailings
which Tenant or its agents shall utilize in seeking to sublet the Premises.
23. DEFAULT.
23.1. The occurrence of any of the following shall constitute a material
default and breach of this Lease by Tenant:
23.1.1. The failure of Tenant to pay or cause to be paid when due any rent,
monies, or charges required by this Lease to be paid by Tenant;
23.1.2. The abandonment of the Premises by Tenant as such term is defined in
the Article titled "Abandonment;"
23.1.3. Tenant causing or permitting, without prior written consent of
Landlord, any act when this Lease requires Landlord's prior written consent or
prohibits such act;
23.1.4. The making by Tenant of any general assignment for the benefit of
creditors or any similar action for the protection or benefit of creditors; the
filing by or against Tenant of a petition to have Tenant adjudged a Chapter 7
debtor or to have debts discharged or of a petition for reorganization or
arrangement under any Law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days of
the appointment of a trustee or receiver to take possession of substantially all
of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within sixty (60) days); the
attachment, execution, or other judicial seizure of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this Lease,
where such seizure is not discharged within sixty (60) days; or Tenant's
convening of a meeting of its creditors or any class thereof for the purpose of
effecting a moratorium or composition of its debts;
23.1.5. If Tenant shall file a voluntary petition in bankruptcy or shall be
adjudicated bankrupt or insolvent, or shall file any petition or answer seeking
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief for itself under any present or future applicable
Law relative to bankruptcy, insolvency, or other relief for debtors, or shall
seek or consent to or acquiesce in the appointment of any trustee, receiver,
conservator or liquidator of Tenant or of all or any substantial part of its
properties or its interest in the Premises (the term "acquiesce" as used in this
Section, includes, but is not limited to, the failure to file a petition or
motion to vacate, appeal or discharge any order, judgment or decree within ten
(10) days after entry of such order, judgment or decree);
23.1.6. If a court of competent jurisdiction shall enter an order, judgment
or decree approving a petition filed against Tenant seeking any reorganization,
arrangement, composition, readjustment, liquidation dissolution or similar
relief under any present or future Federal bankruptcy act, or any other present
or future applicable Law relating to bankruptcy, insolvency, or other relief for
debtors, and Tenant shall acquiesce in the entry of such order, judgment or
decree if such order, judgment or decree shall remain unvacated and unstayed for
an aggregate of sixty (60) days (whether or not consecutive) from the date of
entry thereof, or any trustee, receiver, conservator or liquidator of Tenant or
of all or any substantial part of its property or its interest in the Premises
shall be appointed without the consent or acquiescence of Tenant and such
appointment shall remain unvacated and unstayed for an aggregate of sixty (60)
days (whether or not consecutive);
23.1.7. If Tenant shall admit in writing its inability to pay its debts as
they mature;
23.1.8. If Tenant shall give notice to any governmental body of insolvency
or pending insolvency, or suspension or pending suspension of operations; or
23.1.9. The occurrence of any of the events described in this Article by any
guarantor of Tenant's obligations under this Lease or the default by such
guarantor under its guaranty.
23.1.10. The existence of any material misrepresentation or omission in any
financial statements, correspondence or other information provided to Landlord
by or on behalf of Tenant or any guarantor in connection with (a) Tenant's
negotiation or execution of this Lease; (b) Landlord's evaluation of Tenant as a
prospective tenant at the Project; (c) any proposed or attempted transfer; or
(d) any consent or approval Tenant requests under this Lease.
23.1.11. Guarantor's default (beyond any applicable notice and grace
periods) under any guaranty now or after Lease commencement securing all or any
part of Tenant's obligations under this Lease.
23.1.12. Failure to perform any other provision of this Lease.
23.2. Any such notice provided to Tenant under this Section shall be in lieu
of, and not in addition to, any notice required under Section 1161, et seq., of
the California Code of Civil Procedure. Notices given under this Section shall
specify the alleged default and the applicable Lease provisions, and shall
demand that Tenant perform the provisions of this Lease or pay the rent that is
in arrears, as the case may be, within the applicable period of time, or quit
the Premises. No such notice shall be deemed a forfeiture or a termination of
this Lease unless Landlord so elects in the notice.
23.3. Landlord shall have the following remedies if Tenant commits a
default. These remedies are not all inclusive; they are cumulative in addition
to any remedies now or later allowed by law or other provisions of this Lease.
No waiver by Landlord of a breach of any of the terms, covenants or conditions
of this Lease by Tenant shall be construed or held to be a waiver of any
succeeding or preceding breach of the same or any other term, covenant or
condition therein contained. No waiver of any default of Tenant hereunder shall
be implied from any omission by Landlord to take any action on account of such
default if such default persists or is repeated and no express waiver shall
affect default other than as specified in said waiver. The consent or approval
by Landlord to or of any act by Tenant requiring Landlord's consent or approval
shall not be deemed to waive or render unnecessary Landlord's consent to or
approval of any subsequent similar acts by Tenant. No statement on a payment
check from Tenant or in a letter accompanying a payment check is binding on
Landlord. Landlord may, with or without notice to Tenant, negotiate such check
without being bound to the conditions of any such statement. If Tenant pays any
amount other than the actual amount due Landlord, receipt or collection of such
partial payment does not constitute an accord and satisfaction. Landlord may
retain any such partial payment, whether restrictively endorsed or otherwise,
without prejudice to Landlord's right to collect the balance properly due. If
all or any portion of any payment is dishonored for any reason, payment will not
be deemed made until the entire amount due is actually collected by Landlord.
The foregoing provisions apply in kind to the receipt or collection of any
amount by a lock box agent or other person on Landlord's behalf.
23.3.1. Landlord can continue this Lease in full force and effect and shall
have the right to collect rent when due. During the period Tenant is in default,
Landlord may relet the Premises, or any part thereof, to third parties for
Tenant's account. Landlord shall have the right, with or without terminating
this Lease, to re-enter the Premises and remove all persons and property from
the Premises. Such property may be removed and stored in a public warehouse or
elsewhere at the cost of and for the account of Tenant. Tenant waives and
releases all Claims Tenant may have resulting from Landlord's re-entry and
taking possession of the Premises by any lawful means and removing and storing
Tenant's property as permitted under this Lease, regardless whether this Lease
is terminated and, to the fullest extent allowable under the Laws, Tenant
releases and will indemnify, defend (with counsel reasonably acceptable to
Landlord), protect and hold harmless the Landlord Parties from and against any
and all Claims occasioned thereby. No re-entry or taking possession of the
Premises by Landlord, shall be construed as an election to terminate this Lease
unless a written notice of such intention is given to Tenant. If Landlord shall
elect to re-enter the Premises under the provision of this Section, Landlord
shall not be liable for damages by reason of such re-entry. Tenant shall be
liable immediately to Landlord for all costs Landlord incurs in reletting the
Premises, including, without limitation, brokers' commissions, expenses of
remodeling the Premises required by the reletting, and like costs. Reletting
can be for a period shorter or longer than the remaining term of this Lease.
Tenant shall pay to Landlord the rent due under this Lease on the dates the rent
is due, less the rent Landlord receives from any reletting. After Tenant's
default, and for as long as Landlord does not terminate Tenant's right to
possession of the Premises, if Tenant obtains Landlord's consent, Tenant shall
have the right to assign or sublet its interest in this Lease pursuant to the
Article titled "Assignment." Tenant acknowledges that Landlord shall have the
remedy described in California Civil Code Section 1951.4 (Landlord may continue
this Lease in effect after Tenant's breach and abandonment and recover rent as
it becomes due, if Tenant has the right to sublease or assign, subject only to
reasonable limitations). In the event that Landlord should elect to relet the
Premises or any part thereof on terms and conditions as Landlord in its sole
discretion may deem advisable with the right to make alterations and repairs to
the Premises, it may execute any new lease in its own name. Tenant hereunder
shall have no right or authority whatsoever to collect any rent from such
tenant. The proceeds of any such reletting shall be applied as follows:
23.3.1.1. First, to the payment of any indebtedness other than rent due
hereunder from Tenant to Landlord, including but not limited to storage charges;
23.3.1.2. Second, to the payment of the costs and expenses of reletting the
Premises, including brokerage commissions, alterations and repairs which
Landlord, in its sole discretion, deems reasonably necessary and advisable and
reasonable attorneys' fees incurred by Landlord in connection with the retaking
of the said Premises and such reletting;
23.3.1.3. Third, to the payment of rent and other charges due and unpaid
hereunder; and
23.3.1.4. Fourth, to the prorated value of the concessions granted to Tenant
upon signing the Lease; and
23.3.1.5. Fifth, to the payment of future rent and other damages payable by
Tenant under this Lease.
23.3.2. Landlord can terminate Tenant's right to possession of the Premises
at any time. Unless Landlord shall have notified Tenant in writing that it has
elected to terminate this Lease, Landlord shall not be deemed to have terminated
this Lease, Tenant's right to possession of the Leasehold, the liability of
Tenant to pay rent thereafter, or Tenant's liability for damages under any of
the provisions hereof. Tenant agrees that the service by Landlord of any notice
pursuant to the unlawful detainer statutes of the State of California and
Tenant's surrender of possession pursuant to such notice shall not be deemed to
be a termination of this Lease or of Tenant's right to possession thereof
(unless Landlord elects to the contrary at the time of, or at any time
subsequent to the service of, such notice, and such election be evidenced by a
written notice to Tenant). Acts of maintenance, efforts to relet the Premises,
or the appointment of a receiver on Landlord's initiative to protect Landlord's
interest under this Lease shall not constitute a termination of Tenant's right
to possession. On termination, Landlord has the right to recover from Tenant:
23.3.2.1. The worth, at the time of the award ("The worth, at the time of
the award," as used in this Subsection is to be computed by allowing interest at
the rate of 10% per annum or the maximum amount allowed by law if that rate is
higher than 10%) of the unpaid rent that had been earned at the time of
termination of this Lease; plus
23.3.2.2. The worth, at the time of the award, of the amount by which the
unpaid rent that would have been earned after the date of termination of this
Lease until the time of award exceeds the amount of the loss of rent that Tenant
proves could have been reasonably avoided; plus
23.3.2.3. The worth, at the time of the award, of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds the
amount of the loss of rent that Tenant proves could have been reasonably
avoided; plus
23.3.2.4. Any other amount, and court costs, necessary to compensate
Landlord for all detriment proximately caused by Tenant's default.
23.3.3. Landlord, at any time after Tenant commits a default, can cure the
default at Tenant's costs. If at any time, by reason of Tenant's default,
Landlord pays any sum or does any act that requires the payment of any sum, the
sum paid by Landlord shall be due immediately from Tenant to Landlord at the
time the sum is paid, and if Tenant pays such sum at a later date, it shall bear
interest at the rate of 10% per annum from the date the sum is paid by Landlord
until Landlord is reimbursed by Tenant. The sum, together with accrued
interest, shall be additional rent.
23.4. In the event of a material and undisputed default of Tenant hereunder,
Landlord shall have the right, at its option, to suspend or discontinue all or
any one or more of the services specified in the Article titled "Utilities and
Services" during continuance of any such default; and no such suspension or
discontinuance shall be deemed or construed to be an eviction or ejection of
Tenant.
23.5. Landlord shall be in default of this Lease if it fails or refuses to
perform any provision of this Lease that it is obligated to perform if the
failure to perform is not cured within one (1) month after written notice of the
default has been given by Tenant to Landlord. If the default cannot reasonably
be cured within one (1) month, Landlord shall not be in default of this Lease if
Landlord commences to cure the default within the one (1) month period and
diligently and in good faith continues to cure the default.
23.6. In no event is Landlord liable to Tenant or any other person for
consequential, special or punitive damages, including, without limitation, lost
profits. If Landlord is in default of this Lease, and as a consequence Tenant
recovers a money judgment against Landlord, the judgment shall be satisfied only
out of the proceeds of sale received on execution of the judgment and levy
against the right, title, and interest of Landlord in the Premises, and out of
rent or other income from such real property receivable by Landlord or out of
the consideration received by Landlord from the sale or other disposition of all
or any part of Landlord's right, title, and interest in the Premises. The
obligations of Landlord under this Lease do not constitute personal obligations
of Landlord or the individual partners, shareholders, directors, officers,
employees or agents of Landlord. Tenant shall look solely to Landlord's interest
in the Leased Premises, and to no other assets of Landlord, for satisfaction of
any liability in respect of this Lease, and shall not seek recourse against the
individual partners, shareholders, directors, officers, employees, or agents of
Landlord or any of their personal assets for such satisfaction.
23.7. If a court of competent jurisdiction determines that any act described
in this Article does not constitute a default, and the court appoints a trustee
to take possession of the Premises (or if Tenant remains a debtor in possession
of the Premises) and such trustee or Tenant transfers Tenant's interest
hereunder, then Landlord is entitled to receive, as Additional Rent, the amount
by which the Rent (or any other consideration) paid in connection with the
Transfer exceeds the Rent otherwise payable by Tenant under this Lease.
23.8. Tenant will reimburse and compensate Landlord on demand and as
Additional Rent for any actual loss Landlord incurs in connection with,
resulting from or related to any breach or default of Tenant under this Lease,
regardless of whether suit is commenced or judgment is entered. Such loss
includes all reasonable legal fees, costs and expenses (including paralegal fees
and other professional fees and expenses) Landlord incurs investigating,
negotiating, settling or enforcing any of Landlord's rights or remedies or
otherwise protecting Landlord's interests under this Lease. Tenant will also
indemnify, defend (with counsel reasonably acceptable to Landlord), protect and
hold harmless the Landlord Parties from and against all Claims Landlord or any
of the other Landlord Parties incurs if Landlord or any of the other Landlord
Parties becomes or is made a party to any claim or action: (a) instituted by
Tenant or by or against any person holding any interest in the Premises by,
under or through Tenant; (b) for foreclosure of any lien for labor or material
furnished to or for Tenant or such other person; or (c) otherwise arising out of
or resulting from any act or omission of Tenant or such other person. In
addition to the foregoing, Landlord is entitled to reimbursement of all of
Landlord's fees, expenses and damages, including, but not limited to, reasonable
attorneys' fees and paralegal and other professional fees and expenses, Landlord
incurs in connection with protecting its interests in any bankruptcy or
insolvency proceeding involving Tenant, including, without limitation, any
proceeding under any chapter of the Bankruptcy Code; by exercising and
advocating rights under Section 365 of the Bankruptcy Code; by proposing a plan
of reorganization and objecting to competing plans; and by filing motions for
relief from stay. Such fees and expenses are payable on demand, or, in any
event, upon assumption or rejection of this Lease in bankruptcy.
24. ADVERTISING.
24.1. Tenant shall not affix any signs, banners, advertising placards,
names, insignias, trademarks (collectively referred to in this Article as "Signs
or "Signs") or other descriptive materials on any window or upon the exterior of
the Building, unless Tenant has received the prior written approval of Landlord
as to size, type, color, location, copy, nature and display qualities of any
such proposed materials. Any Sign that is affixed or displayed without
Landlord's written approval shall be subject to a sign removal fee of One
Hundred Dollars ($100.00) per occurrence. All Signs must conform with the other
signs used throughout the Building. Any Sign must meet the requirements of any
Declaration of Restrictions encumbering the Project and the requirements of the
City of Vista. Tenant shall not display, store or sell any merchandise outside
the defined exterior walls and permanent doorways of the Premises. Tenant shall
not install any exterior lighting, amplifiers or similar devices, or use in or
about the Premises any advertising media which may be heard or seen outside the
Premises, such as flashing lights, search lights, loudspeakers, phonographs or
radio broadcasts.
24.2. Tenant shall pay for the creation and installation of the appropriate
tenant identification signs at the Project.
24.3. Landlord shall have the right to prohibit any advertising by any
tenant which, in Landlord's opinion, tends to impair the reputation of the
Building or the Project or their desirability; and upon written notice from
Landlord, any tenant shall refrain from or discontinue such advertising.
25. NO PUBLIC DISCLOSURES.
25.1. The terms and conditions of this Lease constitute proprietary
information of Landlord that Tenant will keep confidential. Tenant's disclosure
of the terms and conditions of this Lease could adversely affect Landlord's
ability to negotiate other leases and impair Landlord's relationship with other
tenants. Accordingly, Tenant will not, without Landlord's consent (which consent
Landlord may grant or withhold in its sole and absolute discretion), directly or
indirectly disclose the terms and conditions of this Lease to any other tenant
or prospective tenant of the Building or to any other person or entity other
than Tenant's employees and agents who have a legitimate need to know such
information (and who will also keep the same in confidence).
25.2. Tenant expressly warrants that the rental rate for such sublet
Premises shall not be included in any printed advertising or mailings which
Tenant or its agents shall utilize in seeking to sublet the Premises.
25.3. Tenant will not record this Lease or a Memorandum of this Lease
without Landlord's prior written consent, which consent Landlord may grant or
withhold in its sole and absolute discretion.
26. LANDLORD'S ENTRY ON PREMISES.
26.1. Upon giving Tenant twenty-four (24) hours notice, Landlord and its
authorized representatives and agents shall have the right to enter or pass
through the Premises during all reasonable hours, including normal business
hours for any of the following purposes:
26.1.1. To determine whether the Premises are in good condition and whether
Tenant is complying with its obligations under this Lease;
26.1.2. To protect the interest therein of Landlord; to make alterations,
additions and to do any necessary maintenance and repairs; to make any
restoration to the Premises, or the building and other improvements in which the
Premises are located, that Landlord has the right or obligation to perform; to
provide any services in accordance with this Agreement; to perform any
obligations of Tenant that Tenant fails to perform; and to take all required
materials and equipment into the Premises and perform all required work therein,
including the erection of scaffolding, props, or other mechanical devices.
26.1.3. To serve, post, or keep posted any notices required or allowed under
the provisions of this Lease;
26.1.4. To post "for sale" signs at any time during the term, to post "for
rent" or "for lease" signs during the last three (3) months of the term, or
during any period while Tenant is in default;
26.1.5. To show the Premises to prospective brokers, agents, buyers,
Tenants, persons interested in an exchange, holders of encumbrances on the
interest of Landlord under the Lease, and prospective, mortgagees or tenants of
the Building at any time during the term; or
26.1.6. To shore the foundations, footings, and walls of the Premises and to
erect scaffolding and protective barricades around and about the Premises, but
not so as to prevent entry to the Premises, and to do any other act or thing
necessary for the safety or preservation of the Premises if there is any
excavation on any adjacent property or nearby street. With Landlord's
consent, Landlord's right under this Subsection extends to the owner of the
adjacent property on which excavation or construction is to take place and the
adjacent property owner's authorized representatives.
26.2. Landlord shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance, loss of quiet enjoyment, or other
damage arising out of Landlord's or Landlord's authorized representative's or
agent's entry on the Premises as provided in this Article except damage
resulting from the acts or omissions of Landlord or its authorized
representatives.
26.3. If during the last month of the term of this Lease Tenant shall have
removed substantially all of Tenant's property and personnel from the Premises,
Landlord may enter the Premises and repair, alter, and redecorate the same,
without abatement of rent and without liability to Tenant and such acts shall
have no effect on Tenant's obligations under this Lease.
26.4. For each of the purposes described in this Article, Landlord shall at
all times have and retain a key with which to unlock all the doors in, upon, or
about the Premises, excluding Tenant's vaults and safes. Landlord shall have
the right to use any and all means which Landlord may deem proper to open such
doors during the continuance of an emergency in order to obtain entry to the
Premises, and any entry to the Premises obtained by Landlord by any of such
means shall not under any circumstances be construed or deemed to be a forcible
or unlawful entry into, or detainer of, the Premises, or to be an eviction of
Tenant from the Premises or any portion thereof. All locks and locking devices
shall be a part of the building's master-keying system and no locks shall be
changed by Tenant or any other person other than Landlord or its agents.
26.5. Tenant shall be entitled to an abatement or reduction of rent, if
Landlord exercises any rights reserved in this Article to the extent that
Landlord's entry and activities interfere with Tenant's business on the
Premises. However, if Landlord's entry and activities on the Premises result
from Tenant's default, Tenant shall not be entitled to any abatement or
reduction of rent.
26.6. Landlord shall conduct its activities on the Premises, as allowed in
this Article, in a manner that will cause the least possible inconvenience,
annoyance, or disturbance to Tenant.
26.7. Nothing in this Article shall prohibit Landlord from entering the
Premises without first giving notice to Tenant, as allowed by law, in response
to an emergency situation.
27. OFFSET STATEMENT, ATTORNMENT, SUBORDINATION.
27.1. After request therefor by Landlord, or in the event that upon any
sale, assignment or hypothecation of the Premises by Landlord, an offset
statement and/or estoppel certificate shall be required from Tenant, Tenant
agrees to deliver a certificate, in recordable form, to any proposed lender or
purchaser, or to Landlord, certifying: (1) The date of commencement of this
Lease; (2) the fact that this Lease is unmodified and in full force and effect
(or, if there have been modifications hereto, that this Lease is in full force
and effect, and stating the date and nature of such modifications); (3) the date
to which the rental and other sums payable under this Lease have been paid; (4)
that there are no defenses or offsets thereto, or stating those claimed by
Tenant (5) that there are no current defaults under this Lease by either
Landlord or Tenant except as specified in Tenant's statement; and (6) such other
matters requested by Landlord, or any proposed lender and/or purchaser. Landlord
and Tenant intend that any statement delivered pursuant to this Article may be
relied upon by any mortgagee, beneficiary, purchaser or prospective purchaser of
the Building or any interest therein. Tenant shall deliver the certificate, in
the form proposed by the requesting entity, within ten (10) days after the
request is made. Tenant's failure to deliver such statements within such time
shall be conclusive upon the Tenant that this Lease is in full force and effect,
except as and to the extent any modification has been represented by Landlord,
and that there are no uncured defaults in Landlord's performance and that not
more than one month's rent has been paid in advance. Such failure also
constitutes a default of this Lease. In such event, Tenant is estopped from
denying the truth of such facts.
27.2. Tenant will, within 10 days after Landlord's request at any time
during the Term, deliver to Landlord complete, accurate and up-to-date financial
statements with respect to Tenant and any Guarantor(s) or other parties
obligated upon this Lease, which financial statements must be (a) prepared
according to generally accepted accounting principles consistently applied, and
(b) certified by an independent certified public accountant or by Tenant's (or
Guarantor's, as the case may be) chief financial officer that the same are a
true, complete and correct statement of Tenant's (or Guarantor's) financial
condition as of the date of such financial statements.
27.3. In the event of termination of any underlying lease, or in the event
of foreclosure or exercise of any power of sale under any mortgage or deed of
trust superior to this Lease or to which this Lease is subject or subordinate,
Tenant, upon demand, shall attorn to the lessor under said underlying lease or
to the purchaser at any foreclosure sale or sale pursuant to the exercise of any
power of sale under any mortgage or deed of trust, in which event this Lease
shall not terminate and Tenant shall automatically be and become the tenant of
the lessor under said underlying lease or to the purchase, whichever shall make
demand therefore. Tenant waives the protection of any statute or rule of law
that gives or purports to give Tenant any right to terminate this Lease or
surrender possession of the Premises upon the transfer of Landlord's interest.
No landlord or purchaser at any foreclosure sale pursuant to the exercise of any
power of sale or any successor thereto shall be liable for any act or omission
of any prior landlord (including Landlord), or subject to any offsets or
defenses which Tenant might have against any prior landlord (including
Landlord), or be bound by any rent or additional rent which Tenant might have
paid in advance to any prior landlord (including Landlord) for a period in
excess of one month, or by any security deposit, cleaning deposit or other
prepaid charge which Tenant might have paid in advance to any prior landlord
(including Landlord), or bound by any agreement or modification of this Lease
made without the prior written consent of such party.
27.4. Upon the request of Landlord, Tenant shall subordinate its rights
hereunder to the lien of any deed(s) of trust or the lien resulting from any
other method of financing or refinancing, now or hereafter in force against the
Premises, Building, or Project or any part thereof, or upon any buildings
hereafter placed upon the Premises, and to all advances made or hereafter to be
made upon the security thereof. This Section shall be self-operative if no
further instrument of subordination is required by any lender, provided that
Tenant's right to possession of the Premises shall not be disturbed so long as
Tenant is not in default hereunder.
27.5. Upon the request of Landlord or any other Party in interest, Tenant
shall promptly execute such documents, instruments or certificates that may be
necessary to carry out the intent of this Article. Tenant's failure to execute
or deliver any certificate, or other document or instrument required by this
Article, in a timely manner, shall be a material breach of this Lease. Landlord
shall be entitled to receive all monetary damages caused by any such breach.
Tenant hereby irrevocably appoints Landlord as attorney-in-fact for Tenant with
full power and authority to execute and deliver, in the name of Tenant, any such
instruments or certificates. If Tenant shall not have executed the same within
fifteen (15) days after the date of a request by Landlord to execute such
instruments, Landlord may, at its option, cancel this Lease without incurring
any liability on account thereof. The term of this Lease is expressly limited
accordingly.
27.6. If, in connection, with obtaining construction, interim, or permanent
financing for the Project the lender shall request reasonable modifications in
this Lease as a condition to such financing, Tenant shall not withhold, delay or
defer its consent thereto, provided that such modifications do not increase the
monetary obligations of Tenant hereunder or materially and adversely affect the
leasehold interest hereby created or Tenant's rights hereunder.
27.7. At any time during the term of this Lease, Tenant shall upon ten (10)
days' prior written notice from Landlord, provide Landlord with a current
financial statement and financial statements of the two (2) years prior to the
current financial statement year. Such statement shall be prepared in
accordance with generally accepted accounting principles and shall be audited by
an independent certified public accountant.
27.8. Tenant will give the holder of any Mortgage, by registered mail, a
copy of any notice of default Tenant serves on Landlord, provided that Landlord
or the holder of the Mortgage previously notified Tenant (by way of notice of
assignment of rents and leases or otherwise) of the address of such holder.
Tenant further agrees that if Landlord fails to cure such default within the
time provided for in this Lease, then Tenant will provide written notice of such
failure to such holder and such holder will have an additional 30 days within
which to cure the default. If the default cannot be cured within the additional
30 day period, then the holder will have such additional time as may be
necessary to effect the cure if, within the 30 day period, the holder has
commenced and is diligently pursuing the cure (including without limitation
commencing foreclosure proceedings if necessary to effect the cure).
28. NOTICE.
28.1. Except as otherwise specifically provided herein, any notice, demand,
request, consent approval, or communication that either Party desires or is
required to give the other Party or any other person, shall be in writing and
shall be deemed to have been duly delivered upon personal delivery, upon
delivery by electronic facsimile transmission (verified by the sending machine),
the following day after sending by overnight courier, or as of the second
business day after mailing by United States registered or certified mail, return
receipt requested, postage prepaid, addressed to the other Party at the address
designated at the beginning of this Lease. Either Party may change its address
by notifying the other Party of the change of address.
29. WAIVER.
29.1. A delay or omission in the exercise of any right or remedy of Landlord
on any default by Tenant shall neither impair such right or remedy nor be
construed as a waiver, nor shall any custom or practice which may grow up
between the parties in the administration of the terms hereof be deemed a waiver
of or in any way affect the right of Landlord to insist upon the performance by
Tenant in strict accordance with said terms.
29.2. The receipt and acceptance by Landlord of delinquent rent shall not
constitute a waiver of any other default; it shall constitute only a waiver of
timely payments for the particular rent payment involved. No payment by Tenant,
or receipt by Landlord, of a lesser amount than the rent payment herein
stipulated shall be deemed to be other than on account of the rent, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment as rent by deemed an accord and satisfaction, (unless Landlord
expressly agrees to an accord and satisfaction in a separate writing duly
executed by Landlord). Landlord may accept any such check or payment without
prejudice to Landlord's right to recover the balance of such rent, including any
interest and late charges, or pursue any other remedy provided in this Lease.
29.3. No act or conduct of Landlord, including, without limitation, the
acceptance of the keys to the Premises, shall constitute an acceptance of the
surrender of the Premises by Tenant before the expiration of the term. Only a
notice from Landlord to Tenant shall constitute acceptance of the surrender of
the Premises and accomplish a termination of the Lease.
29.4. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by Tenant.
29.5. Any waiver by Landlord of any default must be in writing and shall not
be a waiver of any other default concerning the same or any other provisions of
the Lease.
29.6. Any claim Tenant may have against Landlord for default in performance
of any of Landlord's obligations under this Lease is deemed waived unless Tenant
notifies Landlord of the default within 30 days after Tenant knew or should have
known of the default.
30. SALE OR TRANSFER OF PREMISES.
30.1. Upon consummation of a sale, exchange, assignment or other transfer of
all or any portion of the Premises, Landlord shall be released from any
liability and all obligations thereafter accruing under this Lease. Landlord's
covenants and obligations in this Lease bind each successive Landlord only
during and with respect to its respective period of ownership. However,
notwithstanding any such Transfer, the transferor remains entitled to the
benefits of Tenant's releases and indemnity and insurance obligations (and
similar obligations) under this Lease with respect to matters arising or
accruing during the transferor's period of ownership.
30.2. If any Security Deposit or prepaid rent has been paid by Tenant,
Landlord shall transfer the Security Deposit or prepaid rent to Landlord's
successor. Upon such transfer, Landlord shall be discharged from any further
liability in reference to the Security Deposit or prepaid rent.
31. HOLDING OVER.
31.1. If Tenant, with Landlord's consent, remains in possession of the
Premises after expiration or termination of the Lease, or after the date in any
notice given by Landlord to Tenant terminating this Lease, such possession by
Tenant shall be deemed to be a month-to-month tenancy terminable on one (1)
months' notice given at any time by either Party, and neither a renewal hereof
nor an extension for any further term. During such month-to-month tenancy,
Tenant shall pay all rent required by this Lease. All provisions of this Lease
except those pertaining to term shall apply to the month-to-month tenancy.
Acceptance by Landlord of rent after such expiration or earlier termination
shall not constitute a consent to a holding over hereunder or result in a
renewal of this Lease. The provisions of this Article are in addition to and do
not affect Landlord's right of re-entry or any other rights of Landlord under
this Lease or as otherwise provided by law.
32. SURRENDER OF PREMISES.
32.1. Upon expiration of the term or within ten (10) days after termination
of the Lease, Tenant shall quit and surrender to Landlord the Premises and all
Tenant's improvements and alterations in good condition, order, and repair,
except for: (i) ordinary wear and tear occurring after the last necessary
maintenance made by Tenant; (ii) destruction to the Premises covered by the
Article titled "Destruction;" or (iii) alterations that Tenant has the right to
remove or is obligated to remove under the provisions of the Article titled
"Alterations." Tenant shall remove all debris, rubbish, furniture, equipment,
business and trade fixtures, free standing cabinet work, shelving, movable
partitions, and other articles of personal property owned by Tenant or installed
or placed by Tenant at its expense in the Premises, and perform all
restoration made necessary by such removal, prior to surrendering the Premises
to Landlord. Failing such, Landlord may so repair the Premises and charge Tenant
for same, or withhold such sums from any balance of the Security Deposit which
may at the time remain. Tenant shall surrender all keys to the Premises to
Property Manager or to Landlord at the place then fixed for Tenant's payment of
Basic Rent or as Landlord or Property Manager otherwise direct. Tenant will also
inform Landlord of all combinations on locks, safes and vaults, if any, in the
Premises or on the Project.
32.2. Landlord can elect to retain or dispose of (in any manner) any
alterations or Tenant's personal property that Tenant does not remove from the
Premises on expiration or termination of the Lease by giving at least ten (10)
days' notice to Tenant. Title to any such alterations or Tenants' personal
property that Landlord elects to retain or dispose of after expiration of the
ten (10) day period shall vest in Landlord. Tenant waives all claims against
Landlord for any damage to Tenant resulting from Landlord's retention or
disposition of any such alterations or Tenant's personal property. Tenant shall
be liable to Landlord for Landlord's costs for storing, removing, and disposing
of any alterations or Tenant's personal property. Landlord may store Tenant's
personal property in a public warehouse or elsewhere for the account and at the
expense and risk of Tenant. If Tenant shall fail to pay the cost of storing any
such property after it has been stored for a period of thirty (30) days or more,
Landlord may sell any or all of such property at public or private sale, in such
manner and at such times and places as Landlord, in its sole discretion, may
deem proper, without notice to or demand upon Tenant. Landlord shall apply the
proceeds of such sale as follows:
32.2.1. First, to the costs and expenses of such sale, including Landlord's
attorneys' fees;
32.2.2. Second, to the payment of the expense of or charges for removal and
storing any such property;
32.2.3. Third, to the payment of any other sum of money which may then or
thereafter be due to Landlord from Tenant under any of the terms of this Lease;
and
32.2.4. Fourth, the balance, if any, to Tenant.
32.3. If Tenant fails to surrender the Premises to Landlord upon expiration
or ten (10) days after termination of the Lease as required by this Article,
Tenant shall hold Landlord harmless from all damages resulting therefrom,
including, without limitation, claims made by a succeeding Tenant resulting from
Tenant's failure to surrender the Premises.
32.4. The voluntary or other surrender by Tenant or a mutual cancellation of
this Lease shall not work a merger, and shall, at the election of Landlord,
either terminate all or any existing subleases or subtenancies or may operate as
an assignment to it of any or all of such subleases or subtenancies. Landlord
shall exercise its election within one (1) month of the event so requiring.
33. ABANDONMENT.
33.1. Tenant shall not vacate nor abandon the Premises at any time during
the term of this Lease, nor permit the Premises to remain unoccupied for a
period of longer than ten (10) consecutive days during the term of this Lease.
If Tenant shall abandon the Premises, any personal property belonging to Tenant
and left on the Premises shall be dealt with or disposed of as provided in the
Article titled "Surrender of Premises."
34. ATTORNEYS' FEES.
34.1. In the event Landlord or Tenant retains an attorney to enforce any
provision of this Lease against the other, the Party which establishes a breach
of this Lease shall be entitled to recover from the other all expenses
incidental to such enforcement incurred in any legal proceeding whatsoever
(including but not limited to insolvency, bankruptcy, arbitration, declaratory
relief, unlawful detainer or other litigation), regardless of whether or not
suit is brought. Such expenses include, but are not limited to, attorneys'
fees, appraisers' fees, accountants' fees, service of process, filing fees,
court and court reporter costs, investigative costs, expert witness fees, and
the cost of any bonds, whether taxable or not. Such reimbursement shall be
included in any judgment or final order issued in any proceeding. If Landlord
employs a collection agency and/or an attorney to recover delinquent charges or
to otherwise enforce this Lease after Tenant's notice and grace period, if any,
expires, Tenant agrees to pay all collection agency fees and attorneys' fees
(whether or not litigation is commenced or pursued to final judgment) charged to
Landlord in addition to rent, late charges, interest and other sums payable
under this Lease. In addition, Tenant shall pay a charge of Two Hundred Dollars
($200) to Landlord for preparation of a demand for delinquent rent or other
notice of default. Any expenses to which Landlord is entitled shall be
considered as rent and are payable within ten (10) days of notice to Tenant of
the amount due.
34.2. If Landlord is named as a defendant in any suit brought against Tenant
in connection with or arising out of Tenant's occupancy hereunder, Tenant shall
pay to Landlord its costs and expenses incurred in such suit, including without
limitation, its actual professional fees including, but not limited to, the fees
of appraisers, accountants, expert witnesses, and attorneys fees.
35. ACCESS; CHANGES IN BUILDING FACILTIES; NAME.
35.1. Landlord reserves, for the purpose of operation, maintenance,
decoration, and repair, access to:
35.1.1. All walls, windows, and doors bounding the Premises, except the
inside surfaces thereof (including exterior building walls, core corridor walls
and doors, and any core corridor entrance); and
35.1.2. All space in or adjacent to the Premises used for shafts, stacks,
pipes, conduits, fan rooms, ducts, electric or other utilities, sinks, or other
Building facilities, and the use thereof, as well as access thereto through the
Premises. Landlord may install, use and maintain pipes, ducts, and conduits
within the demising walls, bearing columns and ceilings of the Premises.
35.2. Landlord may, at any time before or after completion of the Project,
without incurring any liability to Tenant therefore, make such changes in or to
the Project and the fixtures and equipment thereof or any other portion of the
Project, as well as in or to the street entrances, halls, passages, stairways,
and other improvements thereof, as Landlord may deem necessary or desirable.
35.3. Landlord may, at any time before or after completion of the Project,
without incurring any liability to Tenant therefore, adopt or change any name or
address or identity for the Project (or any part thereof) including roof signs,
entrances, signage, and other Project identification.
36. QUIET ENJOYMENT.
36.1. Notwithstanding any subordination as provided in the Article titled
"Offset Statement, Attornment, Subordination," if Tenant is not in breach under
the covenants made in this Lease, Landlord covenants that Tenant shall have
peaceful and quiet enjoyment of the Premises without hindrance on the part of
Landlord, and Landlord shall defend Tenant in the peaceful and quiet enjoyment
of the Premises against claims of all persons claiming through or under the
Landlord.
37. FORCE MAJEUR.
37.1. Any prevention, delay or stoppage due to strikes, lockouts, labor
disputes, acts of God, inability to obtain labor or materials or reasonable
substitutes therefor, governmental restrictions, regulations, or controls, enemy
or hostile governmental action, civil commotion, fire or other casualty, and
other causes; or, any failure or defect in the supply, quantity or character of
gas, electricity or water furnished to the Premises, by reason of any
requirement, act or omission of the public utility or others furnishing the
Project with gas, electricity or water, or for any other reason, whether similar
or dissimilar to the above beyond the reasonable control of the Party obligated
to perform, shall excuse the performance by such Party for a period equal to
that resulting from such prevention, delay or stoppage, except those obligations
of Tenant to make payment for rental and other charges pursuant to the terms of
this Lease.
38. RELATIONSHIP OF PARTIES.
38.1. The relationship of the Parties hereto is that of Landlord and Tenant,
and it is expressly understood and agreed that Landlord is not in any way or for
any purpose a partner of Tenant, or a joint venturer with Tenant in the conduct
of Tenant's business or otherwise.
39. GENERAL PROVISIONS.
39.1. Unless the context otherwise indicates, whenever used in this
Agreement the word "party" or "parties" means Landlord and/or Tenant, as the
context may require.
39.2. All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine or neuter, singular or plural, as the identity of the
person, persons, entity or entities may require.
39.3. Titles and captions in this Agreement are inserted for convenience of
reference only and do not define, describe, amplify or limit the scope of the
intent of this Agreement or any of the terms hereof.
39.4. References in this Agreement to Articles, Sections, Subsections, and
Exhibits are to Articles, Sections, Subsections and Exhibits herein and hereto
unless otherwise indicated.
39.5. Any exhibits, schedules or descriptions referred to in this Agreement
are expressly incorporated herein by reference as if set forth in full, whether
or not attached hereto.
39.6. The representations, warranties, covenants, agreements and indemnities
set forth in or made pursuant to this Agreement, or in any instrument,
certificate, opinion, or other writing provided for in it, shall remain
operative, shall be deemed made upon execution of this Agreement and shall not
be merged therein.
39.7. This Agreement contains the entire agreement between the parties
relating the transactions contemplated hereby. All prior or contemporaneous
agreements, understandings, representations and statements, oral or written, are
merged herein. Except as expressly provided herein, there are no representations
or warranties between the parties.
39.8. Each party has relied upon its own examination of the entire
Agreement, and the warranties, representations, and covenants expressly
contained in the Agreement itself. The failure or refusal of either party to
inspect the Agreement or other documents, or to obtain legal advice relevant to
this transaction, constitutes a waiver of any objection, contention, or claim
that might have been based upon such reading, inspection or advice. The
submission of this Lease by Landlord, its agent, or its representative for
examination or execution by Tenant does not constitute an option or offer to
lease the Premises or a reservation of the Premises in favor of Tenant, it being
intended that this Lease shall only become effective upon Landlord's execution
and delivery of a fully executed counterpart thereof to Tenant.
39.9. The parties acknowledge that this Agreement, in its final form, is the
result of the combined efforts of the parties hereto and any counsel who may
have advised the parties, neither of which has acted under any duress or
compulsion, whether legal, economic, or otherwise. Should any provision of this
Agreement be found to be ambiguous in any way, such ambiguity shall not be
resolved by construing this Agreement in favor of or against any party herein,
but rather by construing the terms of this Agreement fairly and reasonably in
accordance with their generally accepted meaning and the purposes for which this
Agreement is made. Landlord's submission of this instrument to Tenant for
examination or signature by Tenant does not constitute a reservation of or an
option to lease and is not effective as a lease or otherwise until Landlord and
Tenant both execute and deliver this Lease. The parties agree that, regardless
of which party provided the initial form of this Lease, drafted or modified one
or more provisions of this Lease, or compiled, printed or copied this Lease,
this Lease is to be construed solely as an offer from Tenant to lease the
Premises, executed by Tenant and provided to Landlord for acceptance on the
terms set forth in this Lease, which acceptance and the existence of a binding
agreement between Tenant and Landlord may then be evidenced only by Landlord's
execution of this Lease.
39.10. No modification, waiver, amendment, discharge or change of this
Agreement shall be valid unless the same is in writing and signed by the party,
or their successor in interest, against which the enforcement of such
modification, waiver, amendment, discharge or change is or may be sought.
39.11. In the event any term, covenant, condition, provision or agreement
herein contained is held to be invalid or void by any court of competent
jurisdiction, the invalidity of any such term, covenant, condition, provision or
agreement shall in no way affect any other term, covenant, condition, provision
or agreement herein contained.
39.12. Each of the Parties shall fully cooperate with the other in
connection with the requirements imposed by this Agreement and each agree to
take such further actions and to execute and deliver such further documents,
with acknowledgment or affidavit, if required, as may be reasonably necessary to
carry out the purposes of this Agreement and to facilitate the satisfaction of
any conditions set forth herein.
39.13. This Agreement, and any dispute arising hereunder, shall be construed
and enforced in accordance with, and be governed by, California Laws. The
parties hereto agree that proper jurisdiction and venue for any suit brought to
interpret or enforce any term or provision of this Agreement shall be in San
Diego County, California. The reference in this Lease to any legislation or any
portion thereof shall be read as though the words "or any statutory
modifications or re-enactment thereof or any statutory provisions substituted
thereof" were added to such reference.
39.14. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
39.15. Whenever consent or approval of either Party is required, that Party
shall not unreasonably withhold such consent or approval.
39.16. If Tenant is a corporation, partnership, a limited liability company,
or other entity, execution of this Lease by Tenant constitutes a representation
by Tenant and the officers, partners, members, managers, or other agents of
Tenant executing this Lease that this Lease has been duly authorized by Tenant,
corporation, partnership, or other entity. Tenant shall provide to Landlord a
certified copy of a duly adopted resolution of its partners or the Board of
Directors of Tenant (or other appropriate evidence of authority) authorizing the
execution and delivery of this Lease and naming the officers that are
authorized to execute this Lease on behalf of the corporation.
39.17. If Tenant is an entity, Tenant will, within 10 days after Landlord's
written request, deliver to Landlord: (a) Certificate(s) of Good Standing from
the state of formation of Tenant and, if different, the State, confirming that
Tenant is in good standing under the laws governing formation and qualification
to transact business in such state(s); and (b) a copy of Tenant's organizational
documents and any amendments or modifications thereof, certified as true and
correct by an appropriate official of Tenant. Tenant and each individual
signing this Lease on behalf of Tenant represents and warrants that they are
duly authorized to sign on behalf of and to bind Tenant and that this Lease is a
duly authorized, binding and enforceable obligation of Tenant.
39.18. All parties signing this Lease as Tenant and any Guarantor(s) of this
Lease: (1) is jointly and severally liable for the keeping, observing and
performing of all of the terms, covenants, conditions, provisions and agreements
of this Lease to be kept, observed and performed by Tenant; and (2) the term
"Tenant" as used in this Lease shall mean and include each of them jointly and
severally. The act of, or notice from, or notice or refund to, or the signature
of any one or more of them, with respect to the tenancy of this Lease,
including, but not limited to any renewal, extension, expiration, termination or
modification of this Lease, shall be binding upon each and all of the persons
executing this Lease as tenant with the same force and effect as if each and all
of them had so acted or so given or received such notice or refund or so signed.
39.19. This Lease shall be binding on and inure to the benefit of the
Parties and their heirs, personal representatives, successors, and assigns.,
except as provided in the Articles titled "Assignment" and "Sale or Transfer of
the Premises," and all of the Parties hereto shall be jointly and severally
liable for the covenants contained herein. Notwithstanding the immediately
preceding sentence or any other provision of this Lease, this Lease shall not be
assigned or assignable by operation of law. In no event shall this Lease be an
asset of Tenant in any receivership, bankruptcy, insolvency, or reorganization
proceeding.
39.20. All provisions, whether covenants or conditions, on the part of
Tenant shall be deemed to be both covenants and conditions.
39.21. The definitions contained in this Lease shall be used to interpret
this Lease.
39.22. Rent and all other sums payable under this Lease shall be paid in
lawful money of the United States of America.
39.23. Except as may otherwise be expressly stated, each payment required to
be made by Tenant shall be in addition to and not in substitution for other
payments to be made by Tenant.
39.24. Tenant's execution of this Lease is conditioned upon Landlord's
execution on or before the thirtieth (30th ) day following the date of this
Lease.
39.25. Tenant recognizes that the General Partner of Landlord (i) is
licensed as an attorney in the State of California; (ii) is acting entirely on
behalf of Landlord in this Lease; and (iii) has no fiduciary relationship with
Tenant.
39.26. Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.
39.27. All of Tenant's obligations under this Lease (together with interest
on payment obligations at the rate of 10% per annum or the maximum amount
allowed by law if that rate is higher than 10%) accruing prior to expiration or
other termination of this Lease survive the expiration or other termination of
this Lease. Further, all of Tenant's releases and indemnification, defense and
hold harmless obligations under this Lease survive the expiration or other
termination of this Lease, without limitation.
39.28. With the exception of the real estate brokerage commission, if any,
payable to the party identified in the Definitions section, pursuant to separate
written agreement with Landlord, and which commission Landlord hereby agrees to
pay, each of the parties represents to the other party that it has not incurred,
and agrees to protect, defend, indemnify and hold harmless the other party from
and against, any real estate commission, finder's fee or other compensation
arising out of or in connection with this Lease or the transaction of which this
Lease is a part.
EXECUTED as of the day and year first above written, at San Diego County,
California.
LANDLORD TENANT
NONAR ENTERPRISES, IPAC PRECISION MACHINING, INC.,
a California general partnership a California corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
General Partner Chief Executive Officer
EXHIBIT "A"
SITE PLAN
EXHIBIT "B"
RANCHO VISTA BUSINESS PARK
RULES AND REGULATIONS
These Rules and Regulations (referred to herein as the "Rules") are adopted
by Landlord pursuant to the terms of the lease (referred to herein as the
"Lease") executed by Landlord and Tenant for the Premises located within the
Rancho Vista Business Park (referred to herein as the "Project"). Subject to
any restrictions set forth in the Lease, Landlord may, in Landlord's sole
discretion, enact, rescind, alter or waive any rule or regulation at any time
prescribed for the Project when, in Landlord's judgment, it is necessary,
desirable or proper for the best interest of the Project or its Tenants. Any
such amendment shall be effective immediately upon written notice to Tenant.
Tenant's use of the Premises shall be in accordance with all of the
following:
1. GENERAL RULES.
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1.1. Tenant shall comply with all laws concerning the Premises or
Tenant's use of the Premises, including, without limitation, the obligation at
Tenant's cost to alter, maintain, or restore the Premises in compliance and
conformity with all laws relating to the condition, use, or occupancy of the
Premises during the term.
1.2. Tenant shall not use the Premises in any manner that will
constitute waste, nuisance, or an unreasonable annoyance to the quiet enjoyment
of the tenants of the Building (including, without limitation, the use of
loudspeakers or sound or light apparatus that can be heard or seen outside the
Premises).
1.3. Tenant shall not use the Premises for sleeping, washing clothes,
cooking, or the preparation, manufacture, or mixing of anything that might emit
any odor or objectionable noises or lights.
1.4. Tenant shall not do or permit anything on the Premises that will
cause damage to the Premises. Any overloading of electrical circuits shall be
the responsibility of Tenant.
1.5. After opening for business, Tenant shall continuously remain open
for business at least those days and hours as is customary for a business of a
like character in the city in which the Premises are situated.
1.6. Tenant shall not conduct or permit any sale by auction on the
Premises.
1.7. Without the written consent of Landlord, Tenant shall not use the
name of the Project in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.
1.8. Tenant shall not sell, or permit the sale at retail, of
newspapers, magazines, periodicals, theater tickets or any other goods or
merchandise to the general public in or on the Premises. However, the preceding
limitation shall not apply to the retail sale of goods and merchandise
manufactured or assembled by Tenant at the Premises as required by the Lease.
Tenant shall not make any door-to-door solicitations of business from other
Tenants in the Project. Tenant shall not use the Premises for any business or
activity other than those specifically provided for in Tenant's Lease.
1.9. Tenant, its employees, and or its business customers shall not
disturb, solicit, or canvas any occupant of the Project and shall cooperate to
prevent same.
1.10. No sign, placard, picture, advertisement, name or notice shall be
installed or displayed on any part of the outside or inside (if visible from the
exterior) of any building without the prior written consent of Landlord.
Landlord shall have the right to remove any item installed or displayed in
violation of this Rule without notice to and at the expense of Tenant. All
approved signs or lettering on doors and walls shall be printed, painted,
affixed or inscribed at the expense of Tenant and in a configuration and style
approved by Landlord, in its sole discretion.
1.11. Tenant shall not place anything against or near glass partitions,
doors or windows which may appear unsightly from outside the Premises. If
Landlord objects in writing to any curtains, blinds, shades, screens or hanging
plants or other similar objects attached to or used in connection with any
window or door of the Premises, or placed on any window sill, which is visible
from the exterior of the Premises, Tenant shall immediately remove and/or
discontinue such use.
1.12. Tenant shall not place a load upon any floor of the Premises
which exceeds the load per square foot which such floor was designed to carry
and which is allowed by law. Landlord shall have the right to prescribe the
weight, size and position of all equipment, materials, furniture or other
property brought into the Project. Heavy objects shall, if considered necessary
by Landlord, stand on such platforms as determined by Landlord to be necessary
to properly distribute the weight. All such platforms shall be provided at
Tenant's expense. In the event any of Tenant's business machines or mechanical
equipment cause noise or vibration that may be transmitted to any part of any
structure of the Project to such a degree as to be objectionable to Landlord or
to any other Tenants in the Project, Tenant, at Tenant's sole expense, shall
place and maintain any such equipment on vibration eliminators or other devices
sufficient to eliminate noise or damage to any equipment or other property. All
damage done to the Project by maintaining or moving such equipment or other
property shall be repaired at the expense of Tenant.
1.13. No material, equipment, supplies, or products shall be stored or
permitted to remain in the Project outside a permanent structure unless prior
approval is obtained from Landlord. Approval of outside storage will be granted
only where storage is visually screened from all approaches and where it is
allowed by applicable zoning codes.
1.14. All Tenant's installations, improvements and alterations shall be
carried out in a manner and method designed to minimize removal of such items.
Tenant shall repair any damage resulting from Tenant's installations,
improvements and alterations and the removal thereof upon termination of the
Lease. No Tenant shall lay linoleum, tile, carpet or other similar floor
coverings so that the same shall be affixed to the floor of the Premises in any
manner except as approved by the Landlord. The expense of repairing any damage
resulting from a violation of this rule or removal of any floor covering shall
be borne by the Tenant by whom, or by whose contractors, employees or invitees,
the floor covering shall have been laid.
1.15. Tenant shall not install any radio antenna, television antenna,
or satellite dishes, loudspeaker or other devices on the roof or exterior walls
of any building without the prior written consent of Landlord. Tenant shall not
interfere with radio or television broadcasting or reception from or in the
Project or elsewhere.
1.16. Tenant shall not use any method of heating or air-conditioning
other than that supplied by Landlord, except with the written consent of
Landlord.
1.17. The toilet rooms, toilets, urinals, wash bowls and other
apparatus shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be thrown
therein. The expense of any breakage stoppage or damage resulting from the
violation of this rule shall be borne by the Tenant who, or whose employees or
invitees, shall have caused it.
1.18. Tenant shall not waste water or other utilities that are commonly
metered to the Project.
1.19. Concurrently with Tenant's occupancy of the Premises, Landlord
shall furnish Tenant, free of charge, one set of keys to each door lock on the
Premises. Tenant may have additional keys made at Tenant's expense. Tenant
shall not alter any lock or install any new additional locks or bolts on any
door of the Premises without the written consent of Landlord. Tenant, upon the
termination of its Lease, shall deliver to Landlord all of the existing keys to
all doors of the Premises.
1.20. Tenant assumes any and all responsibility for protecting its
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed. Landlord shall have no duty to
provide security protection for the Premises at any time or to monitor access
thereto.
1.21. Tenant shall see that the doors of the Premises are closed and
securely locked before leaving the Premises and that all water faucets, water
apparatus and electricity are entirely shut off before Tenant or Tenant's
employees leave the Premises. Tenant shall be responsible for any damage to the
Premises, Project or other Tenants caused by a failure to comply with this rule.
1.22. No telegraphic, telephonic, burglar alarm or similar service
shall be installed without the prior written consent of Landlord. Tenant agrees
to acquire, at Tenant's expense, all necessary permits for any burglar or
security alarm systems and provide Landlord with copy of same.
1.23. Tenant shall store all its trash and garbage within its Premises
or in other facilities provided by Landlord and in accordance with directions
issued from time to time by Landlord. Tenant shall not place in any trash box
or receptacle any material which cannot be disposed of in the ordinary and
customary manner of trash and garbage disposal.
1.24. Tenant shall not use or keep in the Premises or about the Project
any kerosene, gasoline, or flammable or combustible fluid or material other than
those limited quantities necessary for the operation or maintenance of office
equipment. All flammable liquids and combustible rags are to be stored in
appropriate storage cabinets approved by the fire department. Tenant shall not
use or permit to be used in the Premises any foul or noxious gas or substance,
or permit or allow the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Project by reason of noise,
odors or vibrations. No animals or birds shall be brought in or kept in or
about the Premises.
1.25. Deliveries of equipment, materials, furniture, packages,
supplies, merchandise or other property shall be received at the Project in a
manner and method which does not impede or interfere with other Tenants or in
the operation of any portion of the Project. Tenant shall be responsible for
all repairs and replacements to the Project required as a result of damage or
injury caused by deliveries to Tenant's Premises.
1.26. Tenant shall not obstruct the sidewalks, halls, passages, exits
and entrances used by them for any purpose other than for ingress to and egress
from their respective Premises. The halls, passages, exits, entrances and roof
are not for the use of the general public and the Landlord shall in all cases
retain the right to control thereof and prevent access thereto by all persons
whose presence in the judgment of the Landlord shall be prejudicial to the
safety, character, reputation and interests of the Project or any of its
Tenants. However, nothing herein contained shall be construed to prevent access
by persons with whom the Tenant normally deals in the ordinary course of
Tenant's business unless such persons are engaged in illegal activities. No
Tenant and no employees or invitees of any Tenant shall go upon the roof of the
Premises or any other building in the Project.
1.27. Tenant shall comply with all safety, fire protection and
evacuation procedures and regulations established by Landlord or any
governmental agency having authority over the Project.
1.28. Tenant shall be responsible for the enforcement of these Rules as
they pertain to Tenant's employees, agents clients, customers, invitees and
guests.
2. PARKING RULES.
---------------
2.1. Landlord shall not be responsible for loss, injury or damage to
any vehicle arising from the use of parking in the Project. In the event the
general exclusion of liability set forth in the preceding sentence is determined
not to apply to any particular claim, specific limitations on liability set
forth below shall apply to any claim against Landlord arising in connection with
the use of parking areas in the Project. All claimed damage or loss must be
reported and itemized in writing, and delivered to Landlord within two (2)
business days after any claimed damage or loss occurs. Any claim not so made is
waived. Landlord has the option to make repairs, at its expense, of any claimed
damage within two (2) business days after filing of any claim. In all court
actions the burden of proof to establish a claim remains with Tenant. Court
actions by Tenant for any claim must be filed within ninety (90) days from date
of parking when a claimed loss occurred. Landlord is not responsible for damage
by water, fire or defective brakes, or parts, or for the act or omissions of
others, or for articles left in the car. The total liability of Landlord is
limited to Two Hundred Fifty and No/100 Dollars ($250.00) for all damages or
loss to any vehicle. Landlord is not responsible for loss of use.
2.2. Tenant shall not park or permit the parking of any vehicle under
Tenant's reasonable control in any parking areas designated by Landlord as areas
for parking by visitors to the Project or for deliveries or assigned to other
Tenants or occupants of the Project. Tenant shall not leave vehicles in the
parking areas overnight nor park any vehicles in the parking areas other than
automobiles, motorcycles, motor driven or non-motor driven bicycles.
2.3. All vehicles must be parked only within the painted stall lines of
a single parking stall. Parking in any other area shall subject the vehicle to
removal. All directional signs and arrows must be observed. The speed limit
within all parking areas shall be five (5) miles per hour.
2.4. Every ▇▇▇▇▇▇ is required to park and lock his or her own vehicle.
All responsibility for damage to a vehicle or theft of property from a vehicle
is assumed by the ▇▇▇▇▇▇.
2.5. Parking areas are for the temporary parking of vehicles only. No
storage of vehicles or other items will be permitted. Washing, waxing, cleaning
or servicing of any vehicle is prohibited. No vehicle repair of any type will
be permitted within the industrial units or on or about the common areas.
2.6. Tenant shall acquaint all persons to whom Tenant assigns parking
spaces of these Rules. Parking attendants, if any, are not authorized to make
or allow any exceptions to the Rules.
3. MISCELLANEOUS PROVISIONS.
--------------------------
3.1. Landlord reserves the right to exclude or expel from the Project
any person who, in Landlord's judgment, is intoxicated or under the influence of
liquor or drugs or who is in violation of any of the Rules. However, Landlord
shall be under no obligation to do so and shall have no liability to Tenant on
account of Landlord's failure to exclude any person.
3.2. Landlord may, in its sole discretion, waive any one or all of
these Rules for the benefit of Tenant or any other Tenant. However, no such
waiver by Landlord shall be construed as a waiver of any other Rule, nor prevent
Landlord from thereafter enforcing any Rules against any or all of the Tenants
of the Project.
3.3. The Rules are in addition to, and shall not be construed to in any
way modify or amend, in whole or in part, the terms, covenants, agreements and
conditions of Tenant's Lease of its Premises in the Project. The Rules
supplement the Lease and in the event of any conflict or inconsistency between
the Lease and the Rules, the Lease shall control.
LANDLORD TENANT
NONAR ENTERPRISES, IPAC PRECISION MACHINING, INC.,
a California general partnership a California corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------- ---------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
General Partner Chief Executive Officer
EXHIBIT "C"
FLOOR PLAN AND
TENANT IMPROVEMENTS
EXHIBIT "D"
HAZARDOUS MATERIALS ADDENDUM
1. As used herein, the terms "Hazardous Material" and "Toxic Waste" shall
include, but are not limited to, petroleum based products, paints and solvents,
lead, cyanide, DDT, printing inks, acids, asbestos, PCB's, contaminants, toxic
wastes, toxic pollutants, dredged soil, solid waste, pesticides, herbicides,
fertilizers and other agricultural chemicals or wastes, incinerator residue,
sewage, garbage, sewage sludge, munitions, chemical products and wastes, and any
other liquid, solid or gaseous pollutants or hazardous substances or wastes
which are or may become subject to regulation under any State or Federal
environmental protection law or regulation.
2. Landlord hereby warrants to Tenant that Landlord has no knowledge of any
Hazardous Material or Toxic Waste existing on the Premises, and that Landlord
has no knowledge of any previous use of the Premises which would result in any
Hazardous Material or Toxic Waste being left or dumped onto the Premises,
including, but not limited to storage tanks above or below the ground.
3. Landlord and Tenant have reviewed the Report of Site Assessment for
Hazardous Materials Contamination, dated October 17, 1989, which indicated that
there was no Hazardous Material or Toxic Waste present on the Premises.
4. Tenant shall make a reasonable inspection as to the existence of
Hazardous Material and Toxic Waste on the Premises prior to the commencement of
the Lease as necessary to satisfy itself as to the condition of the Premises.
5. Should Landlord or Tenant become aware of the existence of any Hazardous
Material or Toxic Waste on the Premises which was present at the commencement of
the Lease, Landlord shall take action to see that said substances are removed
and properly disposed of in an appropriate manner.
6. Tenant shall take all necessary precautions to prevent the use or storage
of any Hazardous Material or Toxic Waste on the Premises in any manner which may
cause contamination of the soils, water, improvements or other portions of the
Premises. Landlord is aware that Tenant will in the normal operation of its
business use chemicals and compounds which may be classified as Hazardous
Materials or Toxic Waste. Tenant hereby represents and warrants to Landlord
that Tenant shall:
6.1. Not dispose of any hazardous or toxic materials or waste on the
Premises;
6.2. Not allow any hazardous or toxic materials or waste to escape
Tenant's control on the Premises or in the Project; and
6.3. Establish and maintain storage, use and disposal procedures to
insure the proper use, storage and disposal of hazardous and toxic materials and
waste. Such procedures shall be set forth in writing and approved by Landlord
prior to Tenant's bringing any hazardous or toxic materials on to the Premises.
7. If, during the term of this Lease, or following its termination, Landlord
or Tenant become aware of the presence of any Hazardous Material or Toxic Waste
present in soils, water, sewer system, improvements or other portions of the
Premises, which were not present at the commencement of the Lease, or which were
caused by Tenant's activities on the Premises, Tenant shall, at Tenant's sole
expense, take action to see that such substances are removed and properly
disposed of in an appropriate manner to restoring the Premises in its prior
condition. Tenant shall indemnify and defend Landlord as to any costs, claims
or liability which may arise as a result of such toxic or hazardous materials on
the Premises or in the Project as a result of Tenant's use of the Premises or
occupancy within the Project.
8. Landlord shall, at an interval determined at Landlord's discretion,
monitor Tenant's program and efforts to manage and control hazardous and toxic
materials and conduct inspections which it deems proper to determine whether any
contamination has taken place. If contamination caused by Tenant is discovered
through such monitoring and inspection, the following program shall be
instituted at Tenant's expense:
8.1. A low level geotechnical reconnaissance shall be conducted to
determine soil classification, depth of ground water, nearest drinking water
aquifer, direction of ground water flow.
8.2. Based on the result of this inspection, three (3) to (6) ground
water monitor ▇▇▇▇▇ shall be placed at strategic points on the Premises or other
appropriate locations in the Project. These are ▇▇▇▇▇ shall use specially
prepared PVC and stainless steel pipes and fittings as recommended by the
testing engineers or technicians.
8.3. A "background analysis" of the site shall then be conducted for
"priority pollutants." This analysis establishes the pollutants present in the
soil and ground water at the beginning of the monitoring period. This analysis
should be maintained on file by Landlord and Tenant for future reference and
comparison.
8.4. Every three (3) years, or such other interval as may be
recommended by the testing engineers or technicians, an analysis shall be made
of the ground water drawn from the monitoring ▇▇▇▇▇ to determine if new or
increased pollutants are present in the ground water. Analysis shall be
conducted by an industrial environmental laboratory using a spectrometer and
other appropriate analytical processes.
8.5. If, on the basis of this testing procedure it is determined that
there is continued pollution of the Premises, Tenant shall immediately take
steps as required, at Tenant's sole expense, to contain, clean up, and
discontinue the contamination of the soil and/or groundwater.
8.6. Regular monitoring of the ground water shall then continue for the
duration of the lease period.
9. The discovery of Hazardous Materials or Toxic Waste on the Premises shall
not constitute grounds for recision or termination of the Lease by the Tenant,
nor for offset against, or abatement of, any rents due under the terms of the
Lease.
LANDLORD TENANT
NONAR ENTERPRISES, IPAC PRECISION MACHINING, INC.,
a California general partnership a California corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------- ---------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
General Partner Chief Executive Officer
